Elon Musk filed a countersuit against Twitter on Friday, escalating his legal battle with the social media company over its abandoned $44 billion deal to acquire the site.
The 164-page lawsuit was filed under seal just before the judge’s 5 p.m. deadline, so its contents were not immediately visible to the public. According to court rules, a partially redacted version could be available next week.
The Post first reported on Musk’s plans for the countersuit, which was filed in the Delaware Court of Chancery.
“I have reviewed the counterclaims and declare that the matter contained therein is true as it relates to my actions and deeds, and as it relates to the actions and deeds of another person, I believe it to be true,” he said a companion filing signed by Musk.
Twitter shares fell 0.3% on the news.
Twitter spokesman Brian Poliakoff declined to comment on the counterclaim.
JB Heaton, an investment researcher and former corporate attorney, told The Post that Musk’s counterclaim was likely filed under wraps because it contains information Twitter shared with Musk under a nondisclosure agreement or other restrictions.
“It’s almost certainly because they’re including facts they received from Twitter under the expectation of confidentiality,” Heaton said.
Judge Kathaleen McCormick of the Delaware Court of Chancery is likely to get the two sides to agree on a partially redacted version, which Heaton said could be released to the public within a week.
The Wall Street Journal reported that Musk’s countersuit includes a reference to a famous Warren Buffett quote: “Only when the tide goes out do you discover who’s been swimming naked.”
The quote is an apparent nod to Musk’s allegation that Twitter was hiding a fake account issue, according to the Journal.
The news comes as Musk and Twitter prepare for an upcoming trial in the social media site’s lawsuit against the mogul for walking out of his $44 billion takeover deal.
Twitter wants to force Musk to honor his original agreement to buy the site for $54.20 per share, while Musk wants to back out of the deal amid alleged concerns about fake accounts.
At a hearing last week, McCormick granted Twitter’s request for an expedited trial — and on Friday she finalized plans for a five-day trial beginning Oct. 17.
Musk’s lawyers wanted the trial to start no earlier than February 2023, arguing that his team needed more time to investigate fake accounts on the site.
“The longer the merger transaction remains in limbo, the greater the cloud of uncertainty hanging over the company,” McCormick said of granting Twitter’s request for an expedited process.
Twitter is trying to force Musk to honor his agreement to buy the company for $54.20 a share, but the company’s shares were trading at $41.50 in after-market trading on Friday, a suggestion that investors are skeptical that the company will prevail.
Many legal analysts have said that Twitter has a strong case against the world’s richest man, but Delaware courts may not be inclined to force Musk to take over a website he doesn’t want. Instead, the company can agree to a lower acquisition price or reach an agreement with Musk.
Musk initially said he backed away from the deal on July 8, accusing Twitter of violating the merger agreement by misleading him about the number of fake accounts on the site.
Twitter sued days later, calling the fake account and claiming to be a diversion, saying Musk was bound by the merger agreement to complete the deal at the agreed price.
With mail wires