Musk files suit against Twitter in counterclaim on $44-bn deal

Elon Musk’s confidential countersuit against Twitter Inc. has intensified his legal battle with the social media firm over his attempt to back out of the $44-billion acquisition

Tesla CEO Elon Musk had pursued the Twitter board with a proposal of $54.20 per share but later announced “terminating” the relationship after claiming the firm had misled him regarding its own count of fake and spam accounts. Twitter’s lawsuit against Musk will go on trial for five days, starting October 17.

Elon Musk, the CEO of Tesla and Twitter, will go on trial in Delaware on October 17 to resolve his attempt to renegotiate the terms of his acquisition of the firm, unless a settlement is reached first.

Chancellor Kathleen St. J. McCormick, the Delaware judge presiding over the case, gave Twitter and Musk’s attorneys a number of strict deadlines to meet in order to get ready for a potential trial.

Elon Musk, the richest man in the world, decided to acquire Twitter. After that, the stock market tailed off, and Musk may have lost some interest. He hinted for months that he was looking for ways to leave the legally binding contract he had signed, and when he finally filed to terminate the deal, Twitter filed a lawsuit against him in the Delaware Court of Chancery to make him compensate for the same.

Musk filed a confidential petition to force the additional documents, so it doesn’t show up on the court’s record. His denials that Twitter was engaging in a deceptive “scheme” involving its stats and user base also fell flat. The docket was made available with McCormick’s order.

Musk attorneys present a complaint against a Twitter whistleblower 

Elon Musk tried to back out of a $44 billion purchase of Twitter, but a Delaware court rejected his request to postpone the trial. However, the multi-billionaire CEO of Tesla will be permitted to include allegations made by a Twitter whistleblower in his countersuit.

Elon Musk’s legal team advised a US judge that the former Twitter security chief’s allegations of serious security issues and dubious activities had improved their weakly argued case.

According to the lawsuit, which requests class-action status, Musk owes a fiduciary duty to Twitter’s shareholders because of his 9.6% ownership position in the business and several company decisions are subject to his veto thanks to the acquisition contract. The Court of Chancery received the case from Luigi Crispo, he holds 5,500 shares of Twitter.

Split verdict in favour of Elon Musk

Nearly two hours after DealBook went to press, Chancellor Kathaleen McCormick, the judge in charge of the case, decided that Musk could modify his lawsuit to include allegations made by Peiter Zatko, a former Twitter security chief, that the social network had misled the public about its security procedures. She did, however, deny Musk’s request for a postponement of the trial, now set to start on October 17.

Twitter has argued that the phoney accounts are a distraction and that it is detrimental to its business for the trial to keep Musk to the agreement to begin as soon as possible. 

Musk’s complaints that Twitter was taking too long to respond to his requests for documents were also denied by Twitter. By refusing to respond to the company’s complaint, which Twitter claimed would clarify the concerns and any counterclaims Musk might make, Musk, according to Twitter, is the one delaying the process. 

Billions of dollars are at risk, but Twitter’s future is also in jeopardy since Musk has stated that the platform should permit any legal speech, an absolutist stance that has caused others to worry whether the network might be used to incite violence.

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