Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Twitter sees first win in case against Elon Musk

Twitter sees first win in case against Elon Musk

A Delaware judge agreed to fast-track the case with an October trial date instead of February that Musk wanted.

Twitter Inc. scored an early win against Elon Musk in its fight to make him complete his $44 billion buyout, as a Delaware judge agreed to fast-track the case with an October trial date.

Chancery Court Chief Judge Kathaleen St. J. McCormick on Tuesday scheduled the trial for five days in the fall, instead of two weeks in February as the billionaire requested. Twitter argued it was suffering under the Tesla Inc. founder’s withdrawal from the deal and disparagement of the social media company.

The ruling marks the first victory for Twitter in a case in which many legal experts say Musk will be the underdog.

In a hearing in Wilmington, the judge made clear she saw little merit in Musk’s scheduling arguments, saying his lawyers “underestimate the ability of this court to quickly process” complex disputes in merger-and-acquisition cases.

McCormick found that the battle over the teetering transaction was “creating a cloud of uncertainty” over Twitter. “The reality is, continued delays threaten imminent harm” to the company, she said.

The judge had no questions for Twitter’s lawyer after his argument but did stop Musk’s attorney when he called the Sept. 19 trial start Twitter proposed “preposterous.” She cited a past case that moved to trial within three months and rejected the Musk lawyer’s argument that she herself took a year to get another case to trial, noting the constraints of the pandemic at the time.

McCormick told the parties to propose specific October dates for the non-jury trial and wrapped up the hearing — held remotely to accommodate her own case of 1Covid1 — in just over an hour and a half.


Twitter Jumps


Twitter shares jumped as much as 5.4% after the ruling. They were trading at $39.32, up 2.4%, at 3:16 p.m. in New York. From the day Musk tweeted that the deal was “on hold” in mid-May, the stock had fallen as much as 22%. It hasn’t traded near the deal price of $54.20 a share since the first two weeks after the acquisition was announced.

Lawyers for San Francisco-based Twitter had said they needed only four days to prove the world’s richest person must honor his agreement. Twitter filed suit last week to force Musk to consummate the transaction.

In Tuesday’s hearing, a lawyer for Twitter argued that Musk was “contractually obligated to use his best efforts to close deal.” Instead, he is “doing the exact opposite,” attorney William Savitt told the judge. “He’s engaging in sabotage.”

Under the buyout agreement, Musk is obligated to finalize the deal within two days of all the closing conditions being met, Savitt said. Those conditions will be met in early September, he said.

“Mr. Musk has no intention of keeping any of his promises,” the lawyer said.


‘Warp Speed’


Musk’s legal team has said Twitter was unfairly pushing for a “warp speed” trial. Musk said Twitter violated the terms of the buyout deal by not turning over detailed information about so-called spam bot accounts within its system. The case requires a “forensic review and analysis of large swaths of data” about the bots along with other legal issues, Musk’s lawyers said in the filing.

Andrew Rossman, a lawyer for Musk, argued at the hearing that there was no need to rush a trial to meet an October deadline specified in the deal. The important date is when the financing commitments for the purchase expire, near the end of April of next year, he told the judge. A February trial would give the court enough time to decide the case and leave room for an appeal, Rossman said.

“The idea of running this case in 60 days” was “extraordinary,” he said of Twitter’s proposed schedule. “It’s a preposterous time frame.”

Rossman dismissed Twitter’s assertion that Musk is trying to run out the clock so the financing commitments lapse. His client “continued to use his best efforts to do the deal” by lining up financing and having his lawyers stay in communication with Twitter on the details right up to the day the company filed suit, he said.

“Mr. Musk has no motivation to harm Twitter,” given that he’s its second-largest shareholder, Rossman said.


Fast Court


In the end, he failed to persuade McCormick to deny Twitter an expedited schedule.

In interrupting his argument, the judge pointed to a 2001 merger fight between chicken processors Tyson Foods Inc. and IBP Inc. that went to trial within three months. The Chancery judge in that case ordered Tyson to proceed with the $4.7 billion buyout of its rival after it sought to cancel the deal.

McCormick rejected Rossman’s citation of a case she presided over herself — private equity firm Kohlberg’s effort to walk away from a $550 million acquisition of cake supplier DecoPac Holdings from Snow Phipps Group LLC — that took a year to get to trial. Questions arose about the buyout just as the pandemic was gaining traction, she noted. In what could be an ominous foreshadowing for Musk, McCormick ordered Kohlberg to close the deal.

Chancery judges in Delaware, the corporate home to more than half of U.S. public companies, are known for being able to parse legal thickets of complex merger-and-acquisition disputes more quickly than many other US courts. Unlike in some states where it can take several years to get a case to trial, Delaware Chancery Court generally moves quicker, with cases often argued within five or six months of being filed.

The case is Twitter v. Musk, 22-0613, Delaware Chancery Court (Wilmington).

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
Wave of Complaints Against Apple Over iPhone 17 Pro’s Scratch Sensitivity
Munich Airport Reopens After Second Drone Shutdown
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
×