Elon Musk to countersue Twitter in attempt to blow up $44B takeover bid: report

The ongoing Elon Musk Twitter takeover saga added a new chapter with a report that the Tesla CEO plans to file a counter lawsuit against Twitter in the coming days.

That’s according to the New York Post, which cited a source to say the move is Musk’s “latest attempt to scrap his $44 billion agreement to buy the social-networking giant.”

Sources told the newspaper Musk’s lawyers are seeking to convince a Delaware Court of Chancery judge to grant them more time and power to gather information about bots on Twitter — bots are automated accounts that function much like human accounts.

“A protracted legal battle could also potentially drag down the company’s stock, giving Musk more leverage to renegotiate Twitter’s sale price,” the Post reported.

Twitter sued Musk in Delaware last week, looking to hold him to the original terms of his offer of $54.20 a share.

“Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” the court filing said, adding, “Musk apparently believes that he…is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”

As noted by the Post, Musk has 20 days from last Tuesday, which is when Twitter filed its suit, to file any counterclaims. Musk has argued for some time that Twitter has failed to provide adequate information about fake accounts on the site.

Twitter’s lawsuit will kick off with a hearing on Tuesday, when Delaware Court of Chancery chancellor Kathaleen McCormick, who would also hear a Musk counter, is expected to entertain the social media platform’s request for an expedited trial, according to the newspaper.

Lawyers for the plaintiff want a four-day trial starting in September, while Musk is looking for the trial to open no earlier than February 2023. Twitter accused Musk of trying to “slow walk” their lawsuit on Monday.

“Millions of Twitter shares trade daily under a cloud of Musk-created doubt,” the company said in a court filing. “No public company of this size and scale has ever had to bear these uncertainties.”

“The core dispute over false and spam accounts is fundamental to Twitter’s value,” Musk’s legal team said in response to Twitter’s suit. “It is also extremely fact and expert intensive, requiring substantial time for discovery.”

University Of Iowa law corporate and finance law professor Robert T. Miller told the Post that a Musk countersuit is probably because “if he doesn’t do that, he’s surrendering.”

Miller previously worked at Wachtell, Lipton, the law firm representing Twitter, and he further stated that a Musk countersuit may not be successful if he reiterates the same claims about Twitter bots without new evidence.

“If the court ultimately rules that Musk must buy Twitter, Miller said the mogul may physically refuse to sign the paperwork to close the acquisition,” the Post reported. “In that case, Delaware has the power to appoint an official called a ‘special master’ to act on his behalf, according to Miller. The court could also hold Musk in contempt, potentially leading to fines or even jail time.”

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