Twitter filed a lawsuit in the Court of Chancery Delaware just 4 days after Elon Musk canceled the Twitter purchase. In the lawsuit, Twitter alleged: “Less than three months later, Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests”.
As Cryptory reported, the Tesla founder officially pulled out of the $44-billion acquisition agreement last week. The reason given by the billionaire was that Twitter breached the deal by failing to hand over data he needs to evaluate the number of bots and spam accounts on the platform. In May, Elon Musk also put the Twitter deal on hold to query 5% of spam/fake accounts on this social media. Two days after striking a deal to purchase Twitter, he used his powerful Twitter account to disparage Twitter executives and the company.
In response, Twitter said that they haven’t breached any obligations and Elon Musk has “knowingly, intentionally, willfully, and materially breached the Agreement.” The company is seeking “specific performance”, which requires Musk to abide by the terms he agreed to and forces him to complete the Twitter deal.
Twitter also stated that since the merge agreement was signed, Musk has disparaged Twitter many times, putting business pressure on the company. Shortly after the 62-page lawsuit was reported, Musk tweeted: “Oh the irony lol.”
The lawsuit is expected to go to trial from September 19. According to documents filed with the US Securities and Exchange Commission (SEC) from April 26, Twitter and Musk will have to pay $ 1 billion if either party unilaterally terminates the deal. Under the terms of the deal, Twitter cannot seek out other buyers but in case the company does get a better offer, it would probably have to pay the split fee. In return, Musk must pay the full amount as promised.
Twitter has hired law firm Wachtell, Lipton, Rosen & Katz to prepare for a legal battle with Musk. Meanwhile, the US billionaire also hired Quinn Emanuel Urquhart & Sullivan, the law firm that helped him win the defamation charge in 2019. According to experts, Musk is likely to lose the lawsuit, but Twitter has partly lost trust of employees, partners and shareholders. As of July 12, Twitter stocks are down 36% from its $54.2 price at the time Musk offered to buy the social network.
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