On July 13, twitter officially filed a lawsuit against Elon Musk, CEO of Tesla, asking the court to force him to complete the acquisition worth $44billion according to the original agreement, laying the groundwork for a protracted legal battle around the fate of this social media service company < p > < / P > < p > in April this year, musk proposed to acquire twitter, but he announced his intention to withdraw from the deal last week. In order to force musk to abide by the acquisition agreement, twitter sued him in the Delaware equity court. The court will decide whether musk still wants to complete the transaction, or whether Twitter has violated its obligation to provide musk with the data he requested, giving it the right to withdraw from the transaction

twitter said in the indictment: "Musk refuses to perform his obligations to Twitter and its shareholders because the agreement he signed is no longer in his personal interests. Musk clearly believes that, unlike other parties bound by Delaware contract law, he is free to change his mind, destroy the company, disrupt its operations, destroy shareholder value, and then exit."

the lawsuit accused musk of "violating a series of major contract terms, casting a shadow over twitter and its business", and asked the court to "force musk to complete the acquisition after meeting a few outstanding conditions"

the prosecution said: "Musk's stake in Tesla is the pillar of his personal wealth, but its value has fallen by more than $100 billion from the peak in November 2021. So musk wants to quit. Musk is not willing to bear the cost of the market downturn in accordance with the requirements of the merger agreement, but hopes to transfer the responsibility to twitter shareholders. This is consistent with the strategy musk has taken against twitter and its shareholders since earlier this year, when he began secretly buying Enter the shares of Twitter and continue to expand the number without notification. "

since agreeing to acquire twitter, musk has also "devalued twitter and this transaction for many times, which has brought business risks to Twitter and caused downward pressure on the stock price. The indictment wrote:" Musk's exit strategy is a model of hypocrisy, because he once claimed that the main reason for acquiring Twitter is to 'eliminate the encrypted spam that he believes is the main obstacle to the user experience'. Musk said he needed to privatize the company, otherwise it would be commercially impractical to eliminate spam

the core of this case is the disclosure of information. In the letter terminating the transaction, musk claimed that Twitter was unwilling to hand over the information about spam robots on the platform, that is, the so-called false account real data. He said on several occasions that he did not believe the company's public statement that about 5% of active users were robots. He said that Twitter deliberately misled him and prevented him from getting more information about how the company interpreted these figures. In addition, musk also questioned Twitter's failure to issue relevant warnings before the recent dismissal of two key executives

but musk signed a legally binding agreement with Twitter. In that contract, twitter included a so-called "specific performance" clause that allowed the company to sue and force musk to complete the acquisition, provided, of course, that the billionaire's financing for the acquisition could be in place

in a letter to Musk's lawyer on Sunday, Twitter's lawyer said that Musk's action to terminate the transaction was "invalid and wrong", and musk "deliberately and substantially violated" the agreement to acquire twitter. The company said it believed in its statistics of spam accounts and hired spam experts to audit the statistics to ensure their accuracy

twitter said in the indictment that musk wanted to withdraw from the deal because changes in the stock market affected his wealth. Tesla's share price has fallen in recent months. He is using the inaccurate spam account data as an excuse to try to avoid fulfilling his obligations under the agreement

according to the lawsuit, musk also violated the agreement not to publicly insult twitter executives and "secretly gave up" his efforts to fight for debt financing for the deal. In doing so, he violated his obligation to "do his best" to complete the transaction. Twitter said: "Musk wants to escape, but the merger agreement leaves him little room."

on Tuesday, Sean Edgett, Twitter's general counsel, informed employees of the lawsuit in an internal memo, and said that the company had "submitted a motion to speed up the trial while prosecuting, and to hold a trial in September, because whether the case can be quickly resolved is of great importance to us."

Twitter is seeking a four-day trial in September this year, and the deadline for the deal is October 24. If the transaction needs to wait for regulatory approval, musk and twitter will have another six months to complete the transaction

nevertheless, Musk's threat to withdraw from the deal may bring twitter back to the negotiating table and allow the billionaire to buy the company at a discounted price. The two sides may also reach a settlement. Alternatively, musk can pay a $1billion "breakup fee" and exit, but this option is only allowed under certain circumstances, such as if Musk's financing fails

if musk successfully gets rid of his entanglement with Twitter, the result may be disastrous for the latter. Twitter's share price is more than 35% lower than Musk's bid of $54.20 a share. In recent months, the business of Twitter has also deteriorated. In May this year, Parag Agrawal, CEO of the company, said in a memo to employees that the company had not achieved its business and financial goals

now that Twitter has filed a lawsuit against musk, it is expected that the latter and his lawyers will respond. Although the subsequent schedule depends on many factors, twitter and musk are likely to be sent to Delaware for the hearing, and both sides will dig for evidence they believe is relevant to the case and beneficial to themselves. Then, the case may enter the trial stage, but the judge in charge of the case may reject Musk's efforts to avoid the transaction. If the lawsuit enters the trial stage, the judge will decide whether the information disclosed by Twitter is sufficient and whether it constitutes material damage to the transaction

both twitter and musk have formed legal teams to prepare for the upcoming legal war. The lawyer who leads Twitter's Delaware lawyer team is a lawyer from Wachtell, Lipton, rosen&katz law firm
2023-03-22 10:04:54