OPINION: This article may contain commentary which reflects the author's opinion.
Elon Musk has responded to a lawsuit from twitter with a lawsuit of his own.
The lawsuit was filed on Friday as part of the ongoing legal battle that has begun after he abandoned the $44 billion deal to purchase the company, The New York Post reported.
“The 164-page suit was filed under seal just before the judge-imposed 5 p.m. deadline, so its contents were not immediately visible to the public. Under court rules, a partially redacted version may be available next week,” the report said.
“I have reviewed the counterclaims and declare that the matter contained therein insofar as it concerns my acts and deeds is true, and insofar as it relates to the acts and deeds of any other person, I believe it to be true,” a filing that was signed by Musk said.
Twitter spokesman Brian Poliakoff declined to comment on the countersuit.
J.B. Heaton, an investment researcher and former corporate attorney, told The Post that Musk’s countersuit was likely filed under seal because it includes information that Twitter shared with Musk under a non-disclosure agreement or other restrictions.
“It’s almost certainly because they are including facts that they have gained under an expectation of confidentiality from Twitter,” Heaton said.
Delaware Court of Chancery Judge Kathaleen McCormick will likely make the two sides agree on a partially redacted version that could be released to the public within a week, according to Heaton.
Twitter scored a major victory against Elon Musk as a judge granted its request for an expedited trial.
It will be a five-day trial beginning in October. The company originally asked for a four-day trial in September to have Musk “honor his obligations,” Yahoo Finance reported.
Musk’s lawyers asked the court to delay the trial to February 2023. They claimed Twitter was in a sudden rush to complete a trial and force the acquisition following two months of alleged “foot-dragging and obfuscation” over requested data relating to bots and other fake accounts. Musk accused Twitter of underreporting the volume of bogus accounts (and failing to provide enough information) in a bid to clinch the deal. As part of the call for a delay, Musk’s lawyers also claimed they needed more time to search Twitter’s raw “firehose” data.
While Twitter didn’t get exactly what it wanted, the ruling is a clear victory for the social network. It won’t have to wait long to obtain a decision and may force Musk to rely primarily on the claims he made when he announced plans to back out of the purchase. There’s a chance Musk may have to continue with the buyout before the year is over, no matter how much he might regret making the offer.
Musk is rolling out a new strategy aimed at blowing up his $44 billion deal to purchase Twitter.
According to reports, the billionaire is planning to countersue the social media giant after Twitter’s board of directors announced they had hired a legal team to sue Musk last week for trying to back out.
“Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” the company said in the lawsuit. “Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”
Musk’s decision to tank the deal came after he and his investment group were unable to obtain more precise information from Twitter about the real number of bot and fake accounts on the platform.
Late Monday, the New York Post reported that Musk’s legal team will ask the Delaware Court of Chancery to grant them more time to obtain additional information regarding bot accounts.
The outlet adds:
Musk has 20 days from last Tuesday, when Twitter’s suit was filed, to file his own counterclaims.
Twitter wants the court to force Musk to purchase Twitter at the agreed-upon price of $54.20 per share, while Musk has argued that he’s allowed to terminate the deal because Twitter has failed to provide adequate information about fake accounts on the site.
The first hearing in Twitter’s suit is scheduled for Tuesday when Delaware Court of Chancery chancellor Kathaleen McCormick is expected to weigh in on Twitter’s request for an expedited trial.
Attorneys for Twitter are pressing for a four-day trial that would begin in September, The Post added, while Musk wants to push a trial date back to no sooner than February 2023.
“The core dispute over false and spam accounts is fundamental to Twitter’s value,” Musk’s lawyers wrote in a filing on Friday in response to Twitter’s suit. “It is also extremely fact and expert intensive, requiring substantial time for discovery.”
Musk’s countersuit would also be heard by McCormick, The Post noted.
According to University of Iowa corporate law and finance law professor Robert T. Miller, who wrote in a Wells Fargo investor note on Monday, the chancellor is “likely to grant” Twitter’s demand for a speedy trial.
It makes sense, then, that Musk would file a countersuit because “if he doesn’t do that, he’s surrendering,” Miller went on to say in an interview with The Post.