Twitter has sued Elon Musk after he pulled out of his Twitter buyout over what he says are concerns about the shocking amount of bot accounts on Twitter.
Twitter said Musk’s decision to pull out of the buyout over the presence of bots is not enough to drop off the deal. Twitter chairman Bret Taylor has said the company will take legal actions. In a tweet, Bret Taylor said The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. “We are confident we will prevail in the Delaware Court of Chancery,” he said.
The Delaware court of chancery has a prowess for handling business disputes and while it doesn’t award damages per se, it can order a party to pay money in the form of restitution. It also can hear cases much more quickly than other courts. In response to the lawsuit, Musk tweeted a meme trolling Twitter.
In the lawsuit filed by Wachtell, Lipton, Rosen & Katz LLP, Twitter says Elon Musk has refused “to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.” Decrying Musk’s shenanigans, the complaint adds, “having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”
The lawsuit goes ahead to say, “Mr. Musk’s and the other Musk Parties’ purported termination is invalid and wrongful, and it constitutes a repudiation of their obligations under the Agreement. Contrary to the assertions in your letter, Twitter has breached none of its obligations under the Agreement, and Twitter has not suffered and is not likely to suffer a Company Material Adverse Effect.” The letter referenced is Musk’s lawyers letter to Twitter claiming that the social media company breached its obligations under the buyout deal; ability to showing that less than 5% of its daily active users are automated spam accounts.
Suing Musk for $54.20 per Twitter share and a probable $1 billion separation fee, Twitter maintains that it “will continue to provide information reasonably requested by Mr. Musk under the Agreement and to diligently take all measures required to close the transaction.” “Twitter reserves all contractual, legal, and other rights, including its right to specifically enforce the Musk Parties’ obligations under the Agreement,” the letter concluded.
