Twitter vs. Elon Musk is moving into the courts. The social media company filed a lawsuit against the world’s richest man on Tuesday, saying that he is refusing to “honor his obligations” under their agreement and seeking to make him complete the deal. Musk is trying to exit the $44 billion acquisition deal they announced on April 25th based on his claims Twitter has failed to satisfy his requests for information about bot activity and spam on the platform.
“Twitter brings this action to enjoin Musk from further breaches, to compel Musk to fulfill his legal obligations, and to compel consummation of the merger upon satisfaction of the few outstanding conditions,” Twitter writes in the lawsuit, which was filed in the Delaware Court of Chancery where the company is incorporated. Catherine Hill, a spokesperson for Twitter, didn’t have a comment beyond the legal filing, while Twitter board chairman Bret Taylor noted the filing in a brief tweet.
Twitter has filed a lawsuit in the Delaware Court of Chancery to hold Elon Musk accountable to his contractual obligations.
— Bret Taylor (@btaylor) July 12, 2022
The lawsuit paints a picture of Musk going out of his way to make an unexpected and unusually generous offer to Twitter, only to almost immediately turn around and start toying with the company and the idea of abandoning their agreement. After the market turned and tech stocks began sinking, Twitter alleges that Musk looked for an escape from the deal, which required a “material adverse effect” or breach of contract. “Musk had to try to conjure one of those,” the lawsuit states.
That’s where Musk’s argument about Twitter having a spam bot problem came in, according to the lawsuit. Despite his concerns, the lawsuit alleges that Musk didn’t ask Twitter about its spam estimates before the agreement was in place. “He even sweetened his offer,” the lawsuit says, by removing a diligence condition from the agreement that would have given him access to non-public information about the company.
Twitter CEO Parag Agrawal has written threads about how the company calculates its estimates of daily active users, and Twitter recently told reporters it blocks 1 million spam accounts every day. In its lawsuit, Twitter cited many of Musk’s own tweets, including his public call for an investigation by the SEC. and memes Musk tweeted over the weekend.
To fight Musk in court, Twitter has secured the legal services of Wachtell, Lipton, Rosen & Katz, a powerhouse firm with deep connections to the Delaware Court of Chancery and its history of hearing high-stakes corporate disputes.
Developing…
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