Musk Loses in Court Attempt to Delay Twitter Trial
2022.07.20 13:09
Musk Loses in Court Attempt to Delay Twitter Trial
- Judge Kathaleen McCormick’s ruling states that the trial in the case of Musk and the social media company should begin in October.
- The billionaire’s lawyers had asked the court to postpone the trial to next year.
- Twitter (NYSE:TWTR) wants to avoid further damage to the company due to the uncertainty surrounding the acquisition deal.
The chancellor of the Delaware Court of Chancery, Kathaleen McCormick (NYSE:MKC), ordered that the five-day trial between Elon Musk and Twitter took place in October and not next year as requested by the billionaire CEO of Tesla (NASDAQ:TSLA).
During the hearing that took place on Tuesday by videoconference, Judge McCormick agreed with the social media company that requested an expedited trial to avoid further damage to its image and to the business itself.
Twitter’s intention is to keep Musk within the commitment to acquire the company for $44 billion and prevent the tycoon from abandoning the deal as his lawyers announced.
The company’s attorney, Bill Savitt, of the firm Wachtell, Lipton, Rosen & Katz, argued during the hearing that the company’s request for the trial to begin in September was similar to the deadlines requested in other cases heard by the court.
Intent to Delay Trial Was Unsuccessful
He indicated that the establishment of a speedy trial schedule was necessary to prevent Twitter’s image and business from being further damaged, due to the uncertainty that reigns around the acquisition agreement that Musk is trying to unilaterally break.
According to Savitt, Musk was trying to delay the trial to “run out the clock” and thus shorten the deadlines for appeals, before the debt commitments that he acquired to finance the purchase of the company expire.
But Musk’s attorney, Andrew Rossman of the law firm Quinn Emanuel, argued that the expedited timeline for the trial was too short. He mentioned that his team doesn’t have enough time to review data on Twitter related to spam accounts.
Rossman said that Twitter wanted “to continue to shroud in secrecy” the real number of spam accounts on the platform, CNBC reported, citing the court filing. He also accused the company of not providing the information requested by Musk.
Savitt then responded that determining the percentage of spam accounts was not the focus of this case. He argued that “nothing in the merger agreement turns on that question.”
Musk’s Lawyers Opposed a Speedy Trial
In a letter to Twitter legal director Vijaya Gadde, Musk’s lawyers explained why the controversial billionaire suggested the takeover deal should be scrapped.
The alleged reasons for breaking the agreement were the same. Twitter had not informed Musk in a timely manner about the spam accounts and the alleged fraud in its messaging service. According to the lawyers, this information was vital so that Musk could better calculate the statistics in question.
Last week, Twitter filed a lawsuit against Musk and several of his associates alleging that the investor “refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
Twitter was asking for a 4-day trial starting in September. Musk and his lawyers responded by asking the court to deny the company’s request to order a speedy trial.
The billionaire wanted the trial to be postponed by the court until next year. The allegation put forward by Musk’s lawyers was that Twitter had initiated a “sudden request for warp speed after two months of foot-dragging and obfuscation.”
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