- Twitter has secured an October trial against Elon Musk, who cancelled his plans to acquire the company on July 8.
- Musk unsuccessfully sought a February trial date, arguing that his team needed time to review data from Twitter.
- Musk could face penalties of at least $1 billion if he does not go through with the deal, according to earlier reports.
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Twitter has been granted an October trial against Elon Musk, who recently canceled his plans to buy the social media company.
October Trial Date
Elon Musk may not walk away from Twitter so easily.
Musk announced on July 8 that he would cancel his planned acquisition of Twitter. In response, Twitter said it would continue to pursue the deal by taking legal action against Musk.
Now, the court case that could force the deal to proceed is set for October. Chancellor Kathaleen McCormick, chief judge of the Delaware Court of Chancery, ruled in favor of Twitter today and granted the firm a five-day expedited trial.
Twitter’s lawyer—Bill Savitt of Wachtell, Lipton, Rosen & Katz—said that a speedy trial is necessary to prevent damage from being done. He added that Musk’s “continued uncertainty… inflicts harm on Twitter, every hour of every day.”
Furthermore, a delayed trial could cause complications. The two firms previously set a “drop dead” date that would allow either party to walk away if no deal is finalized by Oct. 24, while Musk’s debt financing will expire on April 25, 2023.
Musk Has Wavered on Acquisition
Musk, for his part, unsuccessfully sought a February trial date. His legal team argued that a sooner date would provide little time to review the necessary information.
Musk and his lawyers plan to determine the proportion of Twitter accounts that are spam bots or otherwise fraudulent.
This has been an issue since Musk went back on the deal in May. At that time, Musk demanded proof that less than 5% of Twitter’s accounts were fake before proceeding with the deal.
It appeared that the deal had been finalized in June, as Twitter promised to provide a “firehose” of data and Musk began to discuss his plans with employees. However, Musk found the provided data to be insufficient and indicated that he would cancel the deal on July 8.
Musk’s legal team also plans to countersue over the current lawsuit, according to reports from July 18.
Twitter Likely Has the Upper Hand
Most commentary on the case suggests that Twitter will succeed given Musk’s questionable behavior and poor legal grounding.
In fact, Twitter’s own lawyer has argued that “nothing in the merger agreement turns on [the] question” of spam bots. Rather, Savitt says that concerns about spam bots are simply a cover for buyer’s remorse on Musk’s part.
If Twitter succeeds at trial, Musk will face at least $1 billion in penalties or will need to proceed with the deal as planned.
If Musk does go through with the deal, he is expected to add cryptocurrency payments to Twitter and work to eliminate crypto scams. Top crypto exchange Binance is also supporting the deal.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.