Elon Musk files countersuit against Twitter over  billion deal

Elon Musk files countersuit against Twitter over $44 billion deal

WILMINGTON, Del., July 29 (Reuters) – Elon Musk on Friday filed a lawsuit against Twitter Inc. (TWTR.N) and its legal battle against the social media company over its bid to purchase the $44 billion Refraining from escalating, although the lawsuit was filed confidentially.

While the 164-page document was not publicly available, a redacted version could soon be released, according to court rules.

Musk’s lawsuit was filed hours after Chancellor Kathaleen McCormick of the Delaware Court of Chancery ordered a five-day trial beginning Oct. 17 to determine whether Musk can back out of the deal.

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Twitter did not immediately respond to a request for comment.

Also on Friday, Musk was sued by a Twitter shareholder, who asked the court to order the billionaire to complete the deal, find that he breached his duty of loyalty to Twitter shareholders, and award damages for losses he caused.

Musk owes Twitter shareholders because of his 9.6% stake in the company and because the acquisition agreement gives him veto over many of the company’s decisions, according to the lawsuit, which seeks class status. The lawsuit was filed in the Court of Chancery by Luigi Crispo, who owns 5,500 Twitter shares.

Musk, the world’s richest person and CEO of Tesla Inc (TSLA.O), said on July 8 he was calling off the acquisition and accused Twitter Inc of violating the agreement by increasing the number of fake accounts on its misrepresented platform. Continue reading

Twitter sued days later, calling the fake account and claiming to be a diversion, saying Musk was required by the merger agreement to complete the deal at $54.20 per share. Shares of the company closed at $41.61 on Friday, the highest close since Musk abandoned the deal. Continue reading

McCormick took the case to court last week and said she wanted to limit the potential damage to Twitter caused by the deal’s uncertainty.

Twitter has blamed the court battle for falling revenue and chaos at the company. Continue reading

The two sides had agreed in principle to an Oct. 17 trial but disagreed over the limits of discovery or access to internal documents and other evidence.

Musk this week accused Twitter of slowing down in response to his discovery requests, and Twitter accused him of seeking vast amounts of data irrelevant to the main issue in the case: whether Musk had breached the deal contract.

In her decision on Friday, the chief justice seemed to anticipate impending discovery disputes.

“This arrangement does not resolve specific discovery disputes, including the appropriateness of large dataset requests,” McCormick said.

Musk also faces a week-long trial in Wilmington, Delaware, beginning Oct. 24. A Tesla shareholder is seeking to have the electric vehicle maker’s CEO’s record-breaking $56 billion salary package voided as corporate waste and unjust enrichment.

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Reporting by Tom Hals in Wilmington, Del. Edited by Noeleen Walder, Chizu Nomiyama and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

Tom Hals

Thomson Reuters

Award-winning reporter, covering US courts and law from the COVID-19 pandemic to high-profile criminal cases and Wall Street’s biggest failures, with over two decades of international financial news experience in Asia and Europe.

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