Elon Musk who planned the acquisition of Twitter in exchange for $44 billion is in trouble. Twitter sues Elon Musk for the breach of $44 billion acquisition contract.
An attempt to walk off from the company is putting Elon Musk in trouble and Twitter appears to keep it’s promise to sue.
The lawsuit was filed on Tuesday 12, July in Chancery court of Delaware, where Elon was accused of refusing to honor his obligation. The issue began when Musk made an attempt to terminate the merger agreement, signed few months back in April. The agreement that Musk says that he would solely acquire twitter at the price of $44 billion while the lawyers at Twitter after a week claimed it to be invalid and wrongful.
In the backing out deal, Musk accused twitter of refusing to hand over useable user data, claiming that it had misled him. He also made an accusation for it not handing over the number of bots or spam account present, helping himself make a decision to conduct layoffs. Musk’s lawyers considered it a breach of the agreement that means he can walk out without paying breakup fee added in the agreement, i.e. $1 billion.
As an opposition, Twitted considered the points as “pretext” that “lack any merit”. This was accompanied by an argument that the contract signed in April was both binding and should be legally complete. They continued that Musk is trying to back off as it no longer serves his personal interest.
Twitter lawyers have pointed Musk’s personal wealth, tied up in Tesla stock and that it fallen by 44% in 2022 i.e. more than $100 billion dollar in comparison to previous year. They says that Elon is willing to back out so he can shift his cost of downturn on Twitters’ shareholders.
“After putting up a public spectacle to play Twitter, and after proposing and then signing the merger agreement that is seller-friendly, Musk seems to believe that he is not like every party who is subject to Delaware Contract Law, i.e. someone who can changing his mind, disposing of the company’s trash, disrupting its operation, destroying the value of the shareholders, and walk away, said the lawyer for Twitter. “This rejection follows a long list of material contract violations by Musk who have cast a pall over Twitter and its business.”
Twitter lawyers pointed Musk’s tweet, considering that each constitutes a breach of confidentiality and disparagement clauses in the agreement. They further claimed that Elon failed providing enough information of his financing deals and to treat other requests in a reasonable manner.
Twitter covered several speculated areas as possible soft points in the agreement with Musk, including its financing for the agreement. The platform described the debt and capital financing parts of the “airtight” agreement and pointed out Musk’s personal commitment of $33.5 billion.
Twitter also held Musk at least partially responsible for the downturn in Tesla stock. Musk has shown the antics and the disdain for the company that helped in creating greater business risk, pressurizing the stocks. The company is still willing Musk to go with the acquisition as decided. They have asked the court to force him to close the deal and continue.
The company has also requested the case to be heard on expedited basis as there may be prolonged fights in future. There is no comment reached from Musk lawyer yet!