Elon Musk and Twitter are set to face off in October, after the social media giant announced they were taking the Tesla founder over a failed US$44 billion (A$63.7 billion) deal to buy the platform.
Should Twitter be successful in their legal proceedings, the Tesla CEO could be forced to complete the original sale or pay a hefty ‘break-up fee’.
The lawsuit was filed on Tuesday in the US’ mid-Atlantic Delaware’s Court of Chancery. Under Delaware state law, Musk’s team now have 20 days to respond.
Led by litigator William Savitt, Twitter’s legal team will allege Musk breached his contract with Twitter and refused to “honour his obligations to Twitter and its stockholders”. Twitter have also made the motion to complete the trial by October 24, which is the date the deal was originally intended to close by.
In a searing retort, Mr Savitt said that Musk’s actions “inflicts harm on Twitter everyday, every hour and every day,” CNN reports.
“Musk has been and remains contractually obligated to use his best efforts to close this deal,” Mr Savitt said.
“What he’s doing is the exact opposite; it’s sabotage.”
Previously, court documents filed by Mr Savitt claimed that Musk withdrew from the deal despite still being under a binding contract.
“Musk wanted an escape. But the merger agreement left him little room,” wrote Mr Savitt.
“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.”
In response, Musk’s lawyer Andrew Rossman claimed that any assertions that Musk was in breach of the deal were “manufactured”.
The five-day October trial was ordered by the Chancellor Kathaleen McCormick, despite attempts from Musk to delay the trial till next year.
Twitter’s legal team originally proposed an expedited court date in September, which Musk opposed. Instead, Mr Rossman attempted to push for a trial date in early 2023.
However, Chancellor McCormick sided with Twitter, adding that Musk’s team ““underestimate the ability of this court … to quickly process complex litigation”.
“The reality is that delay threatens irreparable harm [to Twitter] … the longer the delay, the greater the risk,” she said.
The high-stakes lawsuit comes as Musk terminated his A$63.7 billion deal to buy Twitter in July.
Central to Musk’s withdrawal was apparent claims that Twitter’s 229 million users could be fake, however Twitter places that figure at around 5 per cent.
In documents presented to Twitter’s chief legal officer, Vijaya Gadde, Musk’s legal team claimed that Twitter was “obligated to provide, information and data” prior to the transaction, and Musk reserves the right to “terminate the agreement”.
“Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data due to concern for what Musk’s own analysis of that data will uncover,” it said.
“In any event, Musk is not required to explain his rationale for requesting the data, nor submit to the new conditions the company has attempted to impose on his contractual right to the requested data.”
Originally published as Elon Musk Twitter lawsuit date scheduled for five days in October
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