Elon Musk’s Twitter Drama Takes New Twist: Tesla CEO Might Be Forced to Complete $44 Billion Purchase
Billionaire and Tesla CEO Elon Musk may have terminated his $44 billion bid to purchase Twitter, but he may be forced to buy the company anyway.
According to legal experts, a U.S. court may force the Tesla chief to complete his purchase worth billions of dollars. Musk terminated the purchase with a letter to Twitter's company board.
It stated concerns about the number of bots and spam accounts on the social media platform and accused the company of lying about it. However, according to The Guardian, Twitter will be seeking legal action for the deal to push through.
Twitter chairman Bret Taylor responded to the letter with a tweet saying that the company intended to pursue legal action to enforce the merger. They will file the case against Elon Musk in the Delaware Court of Chancery.
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.
— Bret Taylor (@btaylor) July 8, 2022
Twitter Assembles Legal Heavyweights Against Elon Musk
Twitter Inc. is heading into the legal battle against Elon Musk prepared, as they hired one of the best firms in handling merger law, Wachtell, Lipton, Rosen, & Katz LLP.
According to Bloomberg, they aim to file the lawsuit early this week. Among the lawyers handling this high-profile case are Bill Savitt and Leo Strine, who served as Chancellor of the Delaware Chancery Court, where the lawsuit will be heard.
Fortune reported that Savitt, a partner at the firm, is a top A-list chancery court litigator hired by various companies based in Delaware. On the other hand, Strine spent 20 years working in the Delaware Court of Chancery as both chancellor and vice-chancellor. He joined the law firm in 2020.
The Delaware Chancery Court often frowns upon individuals or companies backing out of a merger agreement. One of the largest cases that Strine handled may be the key to this case, and it involves the case when Tyson Foods tried to acquire rival IPB Corp. in 2000.
However, Tyson decided to back out of the $3.2 billion merger because they were given misleading information. Strine ruled that Tyson must follow through with the deal, which became a landmark ruling.
As for Elon Musk, he will be sticking with Quinn Emanuel Urquhart & Sullivan LLP, which successfully defended him against a 2019 defamation claim and currently representing him against an ongoing shareholder lawsuit.
READ NEXT: Elon Musk Twitter Deal No More? Tesla CEO Backs Out of $44 Billion Buyout
Elon Musk's Arguments Would Probably Fail in Court, Experts Say
According to The Guardian, many legal experts already say Elon Musk will lose this case. Brian Quinn, an associate professor at Boston College law school, said that Twitter would likely ask for a declaratory judgment that they are not in violation of the contract.
They will also ask the court to order Musk to perform his obligations under the agreement. Quinn also said that Musk's arguments would not hold in court.
His main argument for backing out in the deal, which is Twitter allegedly lying to him about the number of spam accounts and bots, is not "reasonable," and the court will not accept it.
Another legal expert, John Coffee, who works at Columbia University as a law professor, said, "Musk is on very weak legal grounds," as Twitter already gave him access to about everything he needs to know about the percentage of bots and spam accounts among its users.
This sentiment is echoed by Carl Tobias, Williams chair in law at the University of Richmond. Tobias noted that Musk's counsel has only made allegations and arguments for Musk's position.
However, he said the judges would have to decide whether Musk's evidence is persuasive enough. Tobias added that Elon Musk could still settle with Twitter rather than end up buying a company he no longer wants.
READ MORE: Elon Musk Reveals True Feelings for Dogecoin After Massive Crypto Crash, $258 Billion Lawsuit
This article is owned by Latin Post.
Written by: Rick Martin
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