After a Delaware Chancery Court judge decided that a trial will start on October 17, the protracted legal battle between Twitter and Elon Musk is about to enter an intriguing new stage. Twitter used legal action earlier this month to push Musk to finish his planned $44 billion takeover of the social media platform. This occurred days after Musk made the widely-publicized decision to call off the buyout agreement, under which Musk would have paid $54.20 a share for a majority stake in the business.
Musk raised worries about the true scope of bot accounts on the network shortly after making a bid for Twitter. Musk further asserted via his personal Twitter account that Twitter’s issues with spam and phony accounts were much worse than what Twitter has previously acknowledged. Musk once asserted that he did a test at random and discovered that 15% of all Twitter accounts were spam or false accounts. Musk claimed he had made the decision to cancel the transaction in early July and gave all of these justifications, which he described as “misleading claims” made by Twitter executives.
Twitter formally contested this ruling and demanded that Musk carry out the sale as planned. Twitter also cited the impending uncertainty around Musk’s takeover offer as one of the causes of its revenue deficit in its most recent earnings report.
What happens next?
In September, the Delaware Chancery Court’s chief judge, the Honorable Kathaleen St. Jude McCormick, made a decision about Twitter’s request for a four-day trial. The trial will take place on October 17, 2022, according to the judge’s judgment. Musk’s attorneys, on the other hand, wanted the trial postponed until mid-February 2023.
Twitter should be satisfied with today’s decision given that their timeframe has only been stretched by one month, even if they were unable to persuade the judge to set the trial for September. The lawyers for Twitter had argued that the trial’s ongoing delay would only increase the impending ambiguity about the deal’s future and have an impact on Twitter’s future revenue.
Judge Mc Cormick appears to mainly concur with Twitter’s claim that the longer the transaction is pending, the higher the likelihood that the firm will suffer irreparable harm. The judge also observed that Musk’s attorneys appeared to have underestimated the court’s capacity to resolve this complex legal dispute fast.
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According to Musk’s defense attorney Andrew Rossman, his client sought for a February trial date so that he would have time to check Twitter’s claim that less than 5% of its users are fraudulent or spam accounts. Given the prospect that the billionaire may be forced to acquire the business, he also said that Musk had more at stake than Twitter.