Baltimore Sun

Judge sets October trial for Musk-Twitter dispute

Tesla CEO’s team sought delay to ’23, citing complexity around stalled $44B deal

- By Matt O’Brien

Elon Musk lost a fight to delay Twitter’s lawsuit against him as a Delaware judge on Tuesday set an October trial, citing the “cloud of uncertaint­y” over the social media company after the billionair­e backed out of a deal to buy it.

“Delay threatens irreparabl­e harm,” said Chancellor Kathaleen St. Jude McCormick, the head judge of Delaware’s Court of Chancery, which handles many high-profile business disputes. “The longer the delay, the greater the risk.”

Twitter had asked for an expedited trial in September, while Musk’s team called for waiting until early next year because of the complexity of the case. McCormick said Musk’s team underestim­ated the Delaware court’s ability to “quickly process complex litigation.”

Twitter is trying to force the billionair­e to make good on his April promise to buy the social media giant for $44 billion — and the company wants it to happen quickly because it says the ongoing dispute is harming its business.

Musk, the world’s richest man, pledged to pay $54.20 a share for Twitter, but now wants to back out of the agreement.

“It’s attempted sabotage. He’s doing his best to run Twitter down,” said Twitter attorney William Savitt on Tuesday.

Musk has claimed the company has failed to provide adequate informatio­n about the number of fake, or “spam bot,” Twitter accounts, and that it has breached its obligation­s under the deal by firing top managers and laying off a significan­t number of employees. Musk’s team expects more informatio­n about the bot numbers to be revealed in the trial discovery process, when both sides must hand over evidence.

Twitter argues that Musk’s reasons for backing out are just a cover for buyer’s remorse after agreeing to pay 38% above Twitter’s stock price shortly before the stock market stumbled and shares of the electric-car maker Tesla, where most of Musk’s personal wealth resides, lost more than $100 billion of their value.

Savitt said the contested merger agreement and Musk’s tweets disparagin­g the company were inflicting harm on the business and questioned Musk’s request for a delayed trial, asking “whether the real plan is to run out the clock.”

“He’s banking on wriggling out of the deal he signed,” Savitt said.

But Musk attorney Andrew Rossman said the idea that the Tesla CEO is trying to damage Twitter is “prepostero­us. He has no interest in damaging the company,” Rossman said, noting Musk is Twitter’s second-largest shareholde­r with a “far larger stake” than the company’s entire board of directors.

Savitt emphasized the importance of an expedited trial for Twitter to be able to make important business decisions affecting everything from employee retention to relationsh­ips with suppliers and customers.

Rossman said more time is needed because it is “one of the largest take-private deals in history” involving a “company that has a massive amount of data that has to be analyzed.”

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