Twitter sues Elon Musk for backing out of $44 billion takeover deal

Twitter sues Elon Musk for refusing to ‘honor his obligations to the company and stockholders’ after he terminated $44 billion takeover deal

  • Twitter filed suit on Tuesday in Delaware accusing Musk of breaking his contract
  • Musk signed an agreement on April 25 to acquire Twitter for $44 billion
  • But on Friday he said he was backing out of the deal over fake accounts
  • Musk accuses Twitter of failing to disclose key information about fake accounts
  • Now Twitter hopes a judge will order him to complete the merger
  • Company is seeking an expedited trial by September to resolve the matter 
  • Twitter has sued Elon Musk for violating his $44 billion agreement to buy the social media platform.

    The suit filed on Tuesday in Delaware chancery court seeks a ruling that would order the world’s richest person to complete the merger at the agreed price of $54.20 per Twitter share, according to a court filing.

    ‘Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he – unlike every other party subject to Delaware contract law – is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,’ said the lawsuit.

    On Friday, Musk said he was terminating the deal because Twitter violated the agreement by failing to respond to requests for information regarding fake or spam accounts on the platforms, which is fundamental to its business performance. 

    Twitter has sued Elon Musk for violating his $44 billion agreement to buy the social media platform

    Twitter has sued Elon Musk for violating his $44 billion agreement to buy the social media platform

    Twitter filed the lawsuit (above) on Tuesday in Delaware chancery court

    Twitter filed the lawsuit (above) on Tuesday in Delaware chancery court

    Twitter’s General Counsel Sean Edgett informed staff of the lawsuit in a company-wide memo on Tuesday afternoon.

    ‘We have also filed a motion for an expedited trial alongside the complaint, asking for the case to be heard in September, as it is critically important for this matter to be resolved quickly,’ Edgett wrote in the memo, according to the New York Times. 

    ‘At this point we anticipate the next step in the process will be for the court to set a schedule for the case,’ he added.

    The lawsuit was a widely anticipated step after Musk announced his intent to pull out of the April 25 merger agreement, which specified penalties for backing out of the deal.

    Those penalties included a $1 billion breakup fee, and the ability to enforce the contract in court, which Twitter officials had vowed to do. 

    The lawsuit was a widely anticipated step after Musk announced his intent to pull out of the April 25 merger agreement (file photo)

    The lawsuit was a widely anticipated step after Musk announced his intent to pull out of the April 25 merger agreement (file photo)

    Musk argues that Twitter has broken its contractual obligations by failing to disclose information about fake accounts on the platform.

    But it’s unclear whether the courts will be sympathetic to his argument. It the past, courts have forced prospective buyers to follow through on signed merger agreements, though the facts differ in each case.

    Twitter’s lawsuit will be heard in Delaware chancery court, as both Twitter and the company Musk is using to complete the merger are officially incorporated in Delaware.

    Developing story, more to follow. 

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