Twitter sues Elon Musk to honor a $44 billion deal

Twitter sues Elon Musk to honor a $44 billion deal

To purchase the social media platform, Twitter Inc. sued Elon Musk for breaching his $44 billion deal, asking a Delaware court to order Musk to complete the merger at the agreed $54.20 per Twitter share. The case has been filed in the Delaware Court of Chancery.

According to the complaint, Musk believes that, unlike every other party subject to Delaware contract law, he is free to change his mind, refuse the company, disturb its operations, abolish stockholder value and abandon.

In Wall Street history, the lawsuit kicks off what guarantees to be one of the biggest legal battles, pitting one of the business world's largest most colorful entrepreneurs against staid contract language.

On July 8, Musk announced the termination of the agreement because Twitter violated the terms by refusing to adhere to requests for information about fake or spam accounts on the platform, which is critical to the platform's business performance.

The litigation charged Musk with "a long list" of merger agreement violations that "cast a pall over Twitter and its business." For the first time since the deal was announced, it stated that employee attrition has indeed been "on the rise."

Additionally, Twitter charged Musk of "secretly" purchasing shares of the business between January and March without properly informing regulators of his significant purchases, and said he "continued accumulating Twitter stock with the market none the wiser."

Musk declared that the absence of information concerning spam accounts and false statements, which he claimed amounted to a "material adverse event," was the reason he was canceling the deal. Despite Twitter's claim that it eliminated the clause from the merger deal during discussions, he also claimed that management departures amounted to a failure to conduct business in the usual course.

Twitter also claimed that it withheld additional spam account information from Musk out of concern that he might quit the deal and launch a rival platform.

Twitter referred to Musk's justifications as a "pretext" that lacked substance and claimed his choice to go had more to do with the stock market's collapse, particularly for tech equities. Since the announcement of the deal, the value of Tesla's stock, which is the main source of Musk's wealth, has decreased by over 30percent. On Tuesday, the stock ended at $699.21.

Twitter urged the court in a second motion to set a four-day trial for mid-September.

Twitter's complaint, regarding Musk had a case of buyer's remorse and that, not bots, was the cause of his decision to back out of the agreement, according to Boston College Law School professor Brian Quinn. The evidence Twitter provides here "makes a very strong case in support of Twitter closing this acquisition,"

One of the most popular Twitter accounts, Musk's tweets featured an emoji of faces, which the business said violated the merger's "non-disparagement" clause. Images of these tweets were included in the case.

On May 16, Musk sent out the emoji in response to two tweets from Agrawal outlining the company's efforts to combat spam accounts.

Additionally, it featured a screenshot of a text message Musk wrote to Agrawal after Twitter on June 28 asked for clarifications regarding Musk's funding for the deal.

Musk texted Agrawal, "Your lawyers are using these chats to stir up trouble." "That has to end."

Twitter made a note of Musk's tweets that it claimed showed his requests for information about spam were part of a scheme to drive spam data into the public domain after Musk announced he was cancelling the agreement.

The lawsuit stated that for Musk, Twitter, the interests of its stockholders, the transaction Musk consented to and the legal process to execute it all "constitute an elaborate joke."