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Tuesday’s hearing featured sharp verbal arguments from both sides — including Twitter’s attorney at one point referring to Musk as a “fierce adversary” — setting the stage for what is sure to be a contentious legal battle.
Twitter’s general counsel, William Savitt, came out swinging at Musk as the hearing began. Savitt said the ongoing uncertainty over the company from the contract and litigation “harms Twitter every day, every hour, every day.” He also pointed to what Musk described as disparaging Twitter, including on his own platform.
“Musk has been and remains contractually obligated to make every effort to close this deal,” Savitt said. What he is doing is the exact opposite. It’s a spoiler.
Musk’s lawyer, Andrew Rossman, pushed back, saying Musk “has no incentive to keep this going long-term,” noting that the billionaire is one of Twitter’s largest shareholders. He also noted that Twitter did not sue Musk for alleged breach of contract until after he moved to terminate the agreement, citing the company’s expectation that he would deny his travel requests. (The judge said in her opinion that Twitter’s timing was not “unreasonable”.)
Musk’s team proposed that the dispute go to trial early next year. “We’re not completely against travel, we haven’t been here for years,” Rossman said. “What we’re proposing instead, your honor, is an incredibly fast and sensible schedule.”
Following each side’s arguments, the judge hearing the case, Delaware Court Chancellor Kathleen St. Jude McCormick, said Musk’s side “underestimates the ability of this court … to quickly process complex litigation.”
“The reality is that delay threatens irreparable damage [to Twitter] As McCormick announced his schedule, the longer the delay, the worse the damage. She added that while few cases have been heard for more than five days, she will entertain requests from both sides to extend the trial if necessary. .
Even with this early schedule debate, the stakes on Twitter were high. The company was struggling to grow its user base and advertising before Musk’s involvement, and now he and many other tech companies are dragging costs amid high inflation and the threat of a recession. Twitter is looking for a quick resolution to its battle with Musk, which could be exacerbated by costly and protracted litigation that will bring uncertainty to its shareholders, employees and customers and potential disruptions to its business.
“During the hearing, there can be clues as to what you’re going to ask and what you’re going to say and what they’re going to say,” said Carl Tobias, a professor at Richmond Law School.
The case has already faced a bit of a snag: The hearing was originally scheduled to be held in person, but McCormick sent a letter to both sides on Monday warning that she had tested positive for Covid-19 and would be moving the hearing up. .
Rossman on Tuesday called the idea that Mook’s concerns about bots were an excuse to pull out of the deal “absurd.”
“Based on what we’ve seen so far, we have reason to believe they’re accurate numbers. [of bots and fake accounts on Twitter] They are very high [than Twitter has publicly reported]It makes a lot of sense for the long-term value of the company,” Rossman said. He added that Twitter’s claims that Musk is violating the deal could try to oust Mr. Musk. Terminate the deal.”
Musk has asked the court to compel him to complete the deal to buy Twitter. While many legal experts say Twitter may have the stronger case in the dispute, some expect the company to settle with the billionaire if the case drags on, to minimize disruption to its business.
As the dispute unfolds, Twitter and Musk are far apart on whether or not there should be a rapid test. In a statement on Twitter, the two sides agreed to close the deal before the Oct. 24 deadline to ensure the deal is completed and to derail Twitter and its shareholders from Musk’s Airless merger deal amid ongoing market concerns and operational harm.
On Friday’s court filing, Musk’s lawyers called Twitter called for an “extreme trip” and said the argument was “extremely factual and expertly substantiated, requiring sufficient time for discovery.” He also called Twitter’s request “death” by stating that the original agreement would not apply if one of the parties filed a dispute against the agreement. A 10-day trial is scheduled on or after February 13, 2023.
A Twitter lawyer said Tuesday that Musk’s team would need to dig into details related to the number of bots and fake accounts on the platform, saying the discovery process would take months. Bott’s question “is clearly not before the court in this case,” Savitt said.
“Nothing in the merger agreement addresses that question, there is no representation or warranty in the merger related to how many fake accounts there may be on Twitter,” Savitt said. “Musk could have worked hard on this,” he added, before signing the deal.
Despite Mook’s move to terminate the deal, “we remain committed to closing the price and terms agreed upon with Mr. Mook,” Friday’s letter said. “Your vote at the special meeting is critical to our ability to complete the merger.”
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