Twitter sued Tesla CEO Elon Musk on Tuesday to force him to complete the $44 billion acquisition of the social media company. Musk and Twitter have been bracing for a legal fight since the billionaire said Friday he was backing off of his April agreement to buy the company. Twitter’s lawsuit opens with a sharply-worded accusation: "Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests." Twitter filed its lawsuit in the Delaware Court of Chancery, which frequently handles business disputes among the many corporations, including Twitter, that are incorporated there, the AP reports.
"Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he—unlike every other party subject to Delaware contract law—is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away," the suit says. As part of the April deal, Musk and Twitter had agreed to pay each other a $1 billion breakup fee if either was responsible for the deal falling through. The company could have pushed Musk to pay the hefty fee but is going farther than that, trying to force him to complete the full $44 billion purchase approved by the company’s board.
"Oh the irony lol," Musk tweeted after Twitter filed the lawsuit, without explanation. The arguments and evidence laid out by Twitter are "very strong and compelling" and likely to get a receptive ear in the Delaware court, which doesn’t look kindly on sophisticated buyers backing off of deals, says Brian Quinn, a law professor at Boston College. "They make a very strong argument that this is just buyer’s remorse," Quinn said. "You have to eat your mistakes in the Delaware Chancery Court. That’s going to work very favorably for Twitter."
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Musk “has been acting against this deal since the market started turning, and has breached the merger agreement repeatedly in the process," the suit charges. "He has purported to put the deal on ‘hold’ pending satisfaction of imaginary conditions, breached his financing efforts obligations in the process, violated his obligations to treat requests for consent reasonably and to provide information about financing status, violated his non-disparagement obligation, misused confidential information, and otherwise failed to employ required efforts to consummate the acquisition.” Quinn says the biggest surprise is how much evidence Twitter has to reject his arguments for backing out. "They are marshaling many of Musk’s own tweets to hoist him on his own petard," he says.
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