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Twitter-Musk trial set for October in lawsuit over stalled $44 Bn deal

Twitter-Musk trial set for October in lawsuit over stalled $44 Bn deal
Photo Credit: Pixabay
20 Jul, 2022
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Twitter will get an October trial in its lawsuit against billionaire Elon Musk’s change of heart over buying the social media company for $44 billion, after a Delaware judge said that the social media company deserved a “quick resolution of the deal's uncertainty”.

The Delaware Court of Chancery Chancellor Kathaleen McCormick ruled in favour of the expedited five-day trial (to take place in October) after a hearing conducted via teleconference.

The ruling is reportedly a blow to Musk, who pushed for a trial in February 2023 to allow for an extensive investigation into his claims that Twitter has “misrepresented the number of fake or spam accounts”.

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During the hearing, Twitter’s lawyer, Bill Savitt of Wachtell, Lipton, Rosen & Katz, argued that Musk's fixation on bots is a “distraction from the question facing the court: whether Musk broke his legal agreement to buy the company”.

The company further said that delaying the trial into the next year could threaten deal financing. According to Savitt, a quick trial schedule is imperative to stop the ongoing harm Twitter has experienced from the uncertainty of the deal’s closure and alleged ridicule by Musk. In that sense, the October trial date goes in favour of Twitter, to begin with, as the company requested an expedited four-day trial in September.

Andrew Rossman, Musk's lawyer, called the expedited trial "completely unjustifiable," saying it would take months to analyse Twitter's data and consult experts. He said that Twitter had already dragged its feet about sharing information that Musk said he needed to vet the company's estimates of fake accounts.

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Rossman countered that Twitter's user numbers are the key issue at stake in the dispute, and that the court should give Musk's team time to dig in. He accused Twitter of trying to "shroud in secrecy" its spam estimates in order to railroad Musk into completing the deal.

However, Twitter has long said that it estimates less than 5% of daily users are not real people. Musk says he believes the true figure is much higher, but has not presented any evidence for his claim that Twitter is misrepresenting the prevalence of fake accounts on the platform.

The question of how many accounts are not real people "is emphatically and plainly not in front of the court," Savitt said, because it is not part of the agreement Musk signed. He called it "an invented issue" intended to "obfuscate and delay."

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“The reality is that the delay threatens irreparable harm to the sellers and Twitter," McCormick said in her ruling from the bench. "The longer the delay, the greater the risk."

"We are pleased that the court agreed to expedite this trial,” said a senior spokesman of the micro-blogging site after the ruling.