A judge in the United States, Chancellor Kathaleen McCormick, has set a five-day October trial date for the impending legal dispute between the social media behemoth and Tesla CEO, Elon Musk. This is an early success for Twitter.
Aljazeera reports that the focus of the hearing on Tuesday was Twitter’s desire to get a trial date set as soon as September in a dispute centered on Musk’s attempt to back out of a $44 billion deal to buy the firm.
The Tesla CEO was accused by Twitter of damaging its brand and decreasing its value.
“Delay threatens irreparable harm,” said Chancellor Kathaleen McCormick of Delaware’s Court of Chancery, which handles many high-profile business disputes. “The longer the delay, the greater the risk.”
Despite Musk’s earlier this month announcement that he was ending the arrangement, Twitter is attempting to hold him to it, claiming that he “knowingly, intentionally, willfully, and materially breached the agreement.”
The San Francisco-based business is attempting to end months of uncertainty for its operations as Musk tries to back out of the acquisition, alleging that Twitter misled him about the number of fake accounts on the platform.
In order to finalize the transaction at the agreed price of $54.20 per share, Twitter has urged McCormick of Delaware’s Court of Chancery to rule Musk in breach of the contract.
Last week, the company’s worth decreased to $32.65 per share, losing close to $3 billion in value. On Tuesday morning, it was trading at approximately $39.16, up about 2%, and close to the highest level since Musk announced he was quitting.
In September, Twitter requested an expedited trial because it claimed Musk was defaming the company and harming operations by refusing to approve business plans, such as one for employee retention.
“It’s attempted sabotage. He’s doing his best to run Twitter down,” William Savitt, a lawyer for Twitter, said during Tuesday’s hearing, which was held virtually after McCormick said she tested positive for COVID-19.
The business claimed that adopting Musk’s “slow walk” trial date request for 2023 — his legal team had suggested a mid-February start date — left little time for further legal action about deal funding if Musk is required to close. In April, the deal’s finance will run out.
But Musk said on Friday that Twitter was trying to “railroad” him into purchasing the business by requesting a “warp speed” trial.
On Tuesday, McCormick claimed that his attorneys had undervalued the court’s capacity to “quickly process complex litigation.” She gave the parties five days to plan the trial’s schedule, which she set.
Musk has questioned whether the firm lied to regulators about phony accounts and bots on the site ever since agreeing to buy Twitter in April.
Tuesday, a lawyer for Musk accused Twitter of taking too long to answer to requests for information on the formulas used to determine the number of spam accounts, and claimed that a hurried trial will keep the truth from being revealed.
“When Mr Musk started asking questions, the answers he got were alarming,” said Andrew Rossman, Musk’s lawyer, adding that it will take months to analyse massive amounts of data to resolve questions about Twitter’s spam accounts.
Additionally, Rossman called Twitter’s claim that his client was attempting to harm the company “preposterous” and rejected it. Rossman said that Musk is Twitter’s second-largest shareholder and has a much larger investment than the entire board, adding that he has no interest in harming the company.
Twitter has filed a lawsuit against Musk in Delaware as opposed to Silicon Valley, where the firm is headquartered.
The company was founded in the little state, along with many other businesses, and the case will be heard by the Delaware Chancery Court, which has extensive knowledge of commercial conflicts.
