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Monday, March 27, 2023

Twitter Sues Elon Musk to Enforce $44 Billion Buyout Deal — Insists Breach Allegations Lack Merit

Twitter Sues Elon Musk to Enforce $44 Billion Buyout Deal — Elon Musk, CEO of Tesla and SpaceX, is being sued by Twitter Inc. (NYSE: TWTR) for pulling out of the acquisition of the social media platform. Musk and his companies, X Holdings I and X Holdings II, are named as defendants in the complaint, which was filed in the Delaware Court of Chancery.

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Tweeter alleged:

“Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”

According to the lawsuit, the market fell after Musk signed the Twitter agreement, causing the value of his Tesla stake—and hence, his personal wealth—to drop by more than $100 billion since its November 2021 peak.

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The social media giant further asserts that the Tesla CEO’s “exit strategy is a model of hypocrisy” and “a model of bad faith,” stressing that “Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its share price.”

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Twitter argued that Musk’s allegations that it is in substantial breach of the agreement are “pretexts” and “without any merit.” Twitter added: “Twitter faces irreparable harm as a result of the defendants’ breaches and the uncertainty they have created.”

“Musk and his entities should be enjoined from additional breaches, ordered to comply with their duties to work toward achieving the limited closing criteria, and compelled to close upon satisfaction of those conditions,” the suit states. The market giant in social media is asking for relief to the extent allowed by the merger agreement as well as a court order compelling Musk to complete the buyout.

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