Yahoo Finance Elon Musk responds to Twitter’s lawsuit - but what he said remains a secret
Elon Musk has responded to Twitter’s attempt to force a purchase of the social media company - but the details will not be public until Friday.
Lawyers representing Mr Musk planned to file a public version of their answer and counterclaims in Delaware Court of Chancery on Wednesday. The court had previously set a date for Mr Musk and Twitter’s case in October - four months sooner than the world’s richest man had wanted.
But Twitter lawyers complained that they needed more time to review and potentially redact Mr Musk’s sealed filing, saying it refers “extensively” to internal Twitter information and data given to Mr Musk.
Chancellor Kathaleen St Jude McCormick held a quick teleconference on Wednesday before agreeing with Twitter, directing that the public filing be docketed by 5pm on Friday.
It could be filed earlier depending on when Twitter lawyers complete their review.
Twitter lawyers argued that court rules require that five business days lapse before a public version of Mr Musk’s filing is docketed.
“Few cases attract as much public interest as this one, and Twitter is mindful of this court’s commitment to ensuring maximum public access to its proceedings,” Twitter lawyer Kevin Shannon wrote. “Twitter has no interest in proposing any more redactions to defendants’ responsive pleading than are necessary.”
Musk lawyer Edward Micheletti argued that Twitter’s lawyers were misinterpreting the court rules.
Musk lawyers also say there is no confidential information in Mr Musk’s filing that should be withheld from the public.
“Twitter should not be permitted to continue burying the side of the story it does not want publicly disclosed,” Mr Micheletti wrote.
Mr Musk, the world’s richest man, agreed in April to buy Twitter and take it private, offering 54.20 dollars a share and vowing to loosen the company’s policing of content and to root out fake accounts.
Twitter shares closed on Wednesday at 41 dollars, well off a 52-week high of 69.81 dollars.
Mr Musk indicated in July that he wanted to back away from the deal, prompting Twitter to file a lawsuit to hold him to the “seller-friendly” agreement. He said that Twitter has failed to provide him enough information about the number of fake accounts on its service.
Twitter argues that Mr Musk, chief executive of electric car maker and solar energy company Tesla, is deliberately trying to tank the deal because market conditions have deteriorated and the acquisition no longer serves his interests.
Either Mr Musk or Twitter would be entitled to a one billion dollar break-up fee if the other party is found responsible for the agreement failing. Twitter wants more, however, and is seeking a court order of “specific performance” directing Mr Musk to follow through with the deal.
It is unclear who will come out victorious in this case, but should Mr Musk lose it seems unlikely that he will be able to walk away without paying a penalty.
If Mr Musk refuses to buy Twitter he could be held “in contempt and set a daily fine until he complies”, Brian Quinn, a Boston College law professor who teaches about the law relating to mergers and acquisitions, told Bloomberg. “For Musk, that would have to be a rather large number.”
Tesla, which is owned by Mr Musk, is also a Delaware corporation, which would give the court the power to go after Mr Musk’s stock options - but that has never happened before.
Additional reporting by Associated Press
