Elon Musk lost a fight to delay Twitter’s lawsuit against him when a Delaware judge on Tuesday set a trial for October, citing the “cloud of uncertainty” over the social media company after the billionaire backed out of a settlement. to buy it.
“The delay threatens irreparable harm,” said Chancellor Kathaleen St. Jude McCormick, chief judge of the Delaware Court of Chancery, which handles many high-profile business disputes. “The longer the delay, the higher the risk.”
Twitter had called for an expedited trial in September, while Musk’s team asked to wait until early next year due to the complexity of the case. McCormick said Musk’s team underestimated the Delaware court’s ability to “quickly process complex litigation.”
Twitter is trying to force the billionaire to make good on his April promise to buy the social media giant for $44 billion, and the company wants it to happen quickly because it says the ongoing dispute is hurting its business.
Musk, the world’s richest man, has agreed to pay $54.20 per Twitter share, but now wants to back out of the deal.
It is an attempted sabotage. He is doing everything he can to dismantle Twitter,” said attorney William Savitt, who is representing Twitter in the Delaware Court of Chancery before court chancellor Kathaleen St. Jude McCormick. The hearing was held virtually after McCormick said she tested positive for COVID-19.
Musk has claimed that the company has failed to provide adequate information about the number of fake or “spam bot” Twitter accounts and that it has breached its obligations under the settlement by firing senior managers and laying off a significant number of employees.
Savitt said the contested merger deal and Musk’s tweets disparaging the company were hurting business and questioned Musk’s request to delay the trial, asking “if the real plan is to run out the clock.”
“He’s betting on getting out of the deal he signed,” Savitt said.
But the idea that the CEO of Tesla is trying to harm Twitter is “absurd. He has no interest in harming the company,” Musk’s lawyer Andrew Rossman said, noting that he is Twitter’s second-largest shareholder with a stake far larger than that of the entire board.
Savitt stressed the importance of an accelerated test starting in September so that Twitter can make important business decisions that affect everything from employee retention to vendor and customer relationships.
Rossman said more time is needed because it is “one of the largest private deals in history” involving a “company that has a lot of data that needs to be analyzed.” Billions of shares need to be analyzed on their platform.”