United States: Twitter won the battle to force Elon Musk to complete its $44 billion buyout early after a Delaware judge agreed to expedite the case and set a trial date for October.
On Tuesday, Chancery Court Chief Justice Kathleen St. J. McCormick changed the trial date from two weeks in February to five days at the request of the billionaire. Twitter claimed that as a result of Tesla's founder's decision to back out of the agreement, and social media criticism of the company, it was suffering. The decision represents Twitter's first victory in a trial where several legal experts predict that Musk will lose.
Musk's lawyers "underestimated this court's ability to quickly process complex disputes" in mergers and acquisitions cases, the judge said during a hearing in Wilmington, clarifying that he had taken their decisions regarding scheduling. saw little merit in the arguments.
According to McCormick, the conflict surrounding the uncertain transaction was "creating a cloud of uncertainty" on Twitter. The continued delay, she said, "threats imminent loss" to the business. After the argument, the judge asked Twitter's lawyer no questions, but he blocked Musk's lawyer when he called the September 19 hearing "absurd." She denied Musk's attorney's claim that it took her a year to bring another case to trial, citing an earlier precedent in which the case was settled within three months, despite the limitations of the pandemic at the time. was also pointed out.
In less than an hour and a half, McCormick ended the hearing, which had been conducted remotely to accommodate his case of COVID, by requesting that the parties submit specific October dates for the non-jury trial. Do it. According to Twitter's San Francisco-based legal team, it will only take four days to demonstrate that the world's richest man must stick to his commitment. Last week, Twitter sued Musk to force him to complete the deal. At the hearing on Tuesday, a Twitter lawyer argued that Musk was "contractually obligated to use his best efforts to close the deal," but that he is actually "doing the exact opposite." "He's breaking himself.
According to the purchase agreement, Musk is required to complete the transaction within two days after all closing requirements have been met, Savitt said. Those conditions would be met in early September, he predicted. The attorney declared, "Mr. Musk has no intention of fulfilling any of his promises. According to Musk's legal team, Twitter pushed for a "warp speed" test without justification. Musk claimed that by withholding specific information about the so-called spam bot accounts present in its system, Twitter had breached the terms of the buyout agreement. According to Musk's lawyers, the case requires "large-scale forensic review and analysis of data" about the bots, among other legal considerations.
Musk's lawyer, Andrew Rossman, argued during the hearing that there was no need to expedite the outcome of the case to meet the October deadline of the settlement. He informed the judge that the crucial date is when the financing commitment for the purchase expires, which will be closer to the end of April in 2019. According to Rossman, a trial in February would give the court enough time to make a decision when granting permission. Appeal time. He called Twitter's suggested timeline "extraordinary," calling it "the idea of running this case in 60 days." "This deadline is absurd."
Rossman dismissed Twitter's claim that Musk was attempting to extend the time so that funding commitments could end. He claimed that until the day the company filed the lawsuit, his client "continued to use his best efforts to make the deal" by securing funding and getting his lawyers in touch with Twitter about the specifics. For.
Noting that Mr Musk is Twitter's second largest shareholder, he has "no incentive to harm Twitter," Rossman insisted. He ultimately failed to persuade McCormick to decline Twitter's request for an accelerated schedule. The judge interrupted the speaker's statement and brought up the 2001 merger dispute between Tyson Foods and IBP, which resulted in an expedited trial. When Tyson attempted to back down from his rival's $4.7 billion takeover, the chancery judge in that case ordered Tyson to proceed with the takeover.
Rossman cited a case he presided over himself that took a year to reach trial and involved an attempt to back away from the US$550 million acquisition of cake supplier Decopack Holdings of private equity firm Snow Phipps Group. . McCormick dismissed Rossman's quote for that matter. She noticed that as the pandemic gained momentum, concerns emerged about procurement. McCormick instructed Snow Phipps to complete the transaction, which could be a warning sign for Musk.
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