On Tuesday, July 12, Twitter officially filed a lawsuit against Elon Musk in the Delaware Court of Chancery. The company aims to force Musk to finalize his $44 billion deal.
Twitter claims Musk “refused to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
Over the weekend, Twitter Board Chairman Bret Taylor announced the company would pursue legal action against Elon Musk to ensure he seals the deal. The company’s recent lawsuit filing states it is seeking a four-day trial in September.
In its lawsuit, Twitter claims Musk acted in “bad faith” and decided to terminate the deal when “the market started turning.
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” noted Twitter in its complaint.
“Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its share price,” the social media company claims.
Elon Musk submitted a SEC filing last week, stating his intention to terminate his Twitter takeover. The filing included a letter enumerating the reasons for the termination, including Twitter’s failure to provide useful information about spam and fake accounts.
Twitter hired Wachtell, Lipton, Rosen, & Katz LLP to represent it in the lawsuit against Elon Musk. Its legal representation responded to Elon Musk’s termination letter, claiming that his reasons for termination were “invalid and wrongful.”
With the suit filed, a judge could force Elon Musk to finalize his Twitter Takeover or make him pay a $1 billion breakup fee. However, Musk and Twitter could also reach a settlement agreement, renegotiate the price of the deal, or the Tesla CEO could walk away from the takeover without paying at all. On the other hand, Twitter may have to divulge the information that Musk’s camp has been asking for and claims the social media company didn’t provide.
Read Twitter’s lawsuit filing against Elon Musk below.