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Ne Delhi, July 30: Elon Musk filed a private countersuit against Twitter Inc. on Friday, intensifying his legal battle with the social media firm over his attempt to back out of the $44 billion buyout.
Although the 164-page document was not accessible to the public, a redacted version might soon be made available in accordance with court procedures, according to Reuters.
Musk’s lawsuit was submitted hours after Delaware Court of Chancery Chancellor Kathaleen McCormick set a five-day trial starting on October 17 to decide whether Musk can back out of the agreement.
A request for comment from Twitter did not immediately receive a response.
A Twitter shareholder filed a lawsuit against Musk on Friday as well, requesting that the court order the billionaire to complete the transaction, declare that he violated his fiduciary obligation to Twitter shareholders, and grant damages for the losses he caused.
According to the lawsuit, which requests class status, Musk has a fiduciary duty to Twitter’s shareholders because of his 9.6% ownership position in the business and the takeover agreement, which gives him the power to veto many corporate decisions. Luigi Crispo, who owns 5,500 shares of Twitter, filed the complaint in the Court of Chancery.
Musk, the richest man in the world and CEO of Tesla Inc., announced his decision to end the acquisition on July 8 and accused Twitter Inc. of breaching the agreement by exaggerating the number of fake accounts on its platform.
Days later, Twitter filed a lawsuit, claiming that Musk was required by the merger agreement to close the deal at $54.20 per share and that the false account claims were a diversion. The company’s shares closed at $41.61 on Friday, the highest close since Musk backed out of the agreement.
In order to lessen the possible harm to Twitter that the deal’s uncertainty could bring, McCormick accelerated the matter to trial last week.
Twitter has attributed Twitter’s declining revenue and internal commotion to the legal battle.
The trial was set for October 17, but the two parties couldn’t agree on how much access to internal documents and other evidence should be allowed during discovery.
This week, Musk accused Twitter of being slow to respond to his discovery requests, and Twitter countered that he was requesting a tonne of information that was unrelated to the case’s central question of whether Musk had broken the terms of the pact.
In her ruling on Friday, the top judge seemed to foresee future issues over discovery.
According to McCormick, “This order does not resolve any specific discovery disputes, including the propriety of any requests for large data sets.”
Additionally, Musk will stand trial for one week starting on October 24 in Wilmington, Delaware. The record-breaking $56 billion compensation plan for Tesla’s CEO is being challenged as corporate waste and unfair enrichment by a stakeholder of the electric vehicle manufacturer.
