Twitter will face Elon Musk in court in October

The lawsuit over Elon Musk's attempt to back out of buying Twitter will now be held in October, despite the Tesla CEO's lawyers pressing for a 2023 date.

Shortly after Musk filed to try to exit his $44 billion deal to buy Twitter, the social media company sued him. The court's decision to hold it in October is significantly closer to the social media site's request to have it in September 2022, than it is to Musk's for a February 2023 one,.

According to legal site The Recorder, Chancellor Kathaleen McCormick decided on the October date in part because Twitter could be harmed by an extended wait.

The Delaware court's Chancellor McCormick was reportedly not persuaded by Musk lawyers argument that months more were needed for discovery about bots and spam Twitter accounts. She said that her timeline is on par with other cases of broken contracts that the court has presided over.

"Suffice it to say, in my view, the defendants underestimate the court and counsel for both parties to quickly process complex litigation," said Chancellor McCormick. "I've witnessed the talent of counsel on this Zoom call representing all parties on these complex issues, and I am confident that you all will rise to the challenge again.

Elon Musk's case appears set to ride on the issue over Twitter's alleged inaccurate reporting of spam accounts on its service. Bill Savitt, representing Twitter with the firm Wachtell, Lipton, Rosen & Katz, says the social media company believes the issue is irrelevant — but had provided the requested information anyway.

"What we have here is a buyer looking for an exit ramp for a deal that doesn't have one," said Savitt. "In retrospect, it was clear that Musk was never going to take 'yes' for an answer."

Andrew Rossman of Quinn Emanuel Urquhart & Sullivan, representing Musk, denied Twitter's claim that an extended court delay could harm the company. He said that Musk, as Twitter's second-largest shareholder, has no reason to harm the company.

"It's rich indeed, your honor, for Twitter to be complaining about Mr. Musk's conduct here," said Rossman. "They didn't make a breach claim. They didn't notice a breach."

"The tweets that they claim now are disparaging the company, they did not claim that that was a breach of the merger agreement until we issued the termination letter," he continued. "They did not claim that he failed to fulfill his reasonable best efforts obligation."

Although the Delaware court has announced that the case will be held in October, and over up to five days, it has yet to specify a starting date.

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10 Comments

rob53 3299 comments · 13 Years

About 2 years ago

It will be interesting to see what Elon’s lawyers come up with. A trial could hurt Twitter more than Elon if/when discovery finds it’s loaded with fake accounts and bots. Have to wonder if any government agency has control over how Twitter operates. Seems everyone is telling Apple how they can operate so why not Twitter.

DAalseth 3013 comments · 6 Years

rob53 said:

It will be interesting to see what Elon’s lawyers come up with. A trial could hurt Twitter more than Elon if/when discovery finds it’s loaded with fake accounts and bots. Have to wonder if any government agency has control over how Twitter operates. Seems everyone is telling Apple how they can operate so why not Twitter.

I don’t know. If as Twitter alleges, and multiple reports I’ve read indicate, that he waved ~~discovery~~ due diligence, than it may be irrelevant if Twitter is 100% bots. If that wasn’t a clause in the deal then Musk couldn’t break the deal by claiming it was a violation. Mind you IANAL, and I’m just going on what I’ve read. But it seems like Musk is trying to distract from the core of the suit, that he may have broken the contract without relevant cause.

Stabitha_Christie 559 comments · 3 Years

rob53 said:

It will be interesting to see what Elon’s lawyers come up with. A trial could hurt Twitter more than Elon if/when discovery finds it’s loaded with fake accounts and bots. Have to wonder if any government agency has control over how Twitter operates. Seems everyone is telling Apple how they can operate so why not Twitter.

That's a weird statement. It's like saying "A trial cold hurt Elon Musk more than Twitter if/when discovery finds out he lied about his reasons for backing out of the deal." Of course discovery is going harm a party acted maliciously, that is the case with any trial.

Also, Elon Musk has to show that Twitter knew that the information provided to the SEC was incorrect. It isn't enough show simply show there are more bots than Twitter has claimed he has to show Twitter was intentionally misleading. Those are two very different things.

I'd honestly be surprised if Twitter filed this lawsuit knowing that they have information that shows they lied to the SEC. Losing the lawsuit would be the least of their problems if that were the case.

DAalseth said:

rob53 said:

It will be interesting to see what Elon’s lawyers come up with. A trial could hurt Twitter more than Elon if/when discovery finds it’s loaded with fake accounts and bots. Have to wonder if any government agency has control over how Twitter operates. Seems everyone is telling Apple how they can operate so why not Twitter.

I don’t know. If as Twitter alleges, and multiple reports I’ve read indicate, that he waved discovery, than it may be irrelevant if Twitter is 100% bots. If that wasn’t a clause in the deal then Musk couldn’t break the deal by claiming it was a violation. Mind you IANAL, and I’m just going on what I’ve read. But it seems like Musk is trying to distract from the core of the suit, that he may have broken the contract without relevant cause.

He did't waive the right to discovery. Discovery is part of the trial process. He waived the right to due diligence, that means that as part of the deal he accepted Twitters public facing statements at face value. So his complaint that Twitter didn't provide confidential information to validate the public statements won't fly.

foregoneconclusion 2824 comments · 12 Years

From what I've seen, best case scenario for Musk now is that the lawyers involved negotiate a termination fee that is significantly higher than $1 billion.