Twitter sues Musk after he tried to back out of a $44 billion deal

Now that Twitter has sued, Mr. Musk and his lawyers are expected to respond. While the timing after that depends on many factors, the company and mr. Musk will likely be called to a hearing in Delaware and go through a fact-finding process in which both sides will unearth facts they believe are relevant to the case.

The case could then go to court, although there is a chance the judge appointed to handle the case will fire Mr. K. Musk’s attempts to leave. If the lawsuit goes to court, a judge will decide whether Twitter’s disclosures were insufficient and caused financial damage to the deal.

In the past, the Delaware Court of Chancery has prevented companies from pulling out of deals. For example, in 2001, when Tyson Foods tried to back out of acquiring IBP’s meatpacking plant, the court ruled that Tyson must honor the agreement. In situations where the court allowed the buyers to leave, he demanded damages from them. Based on most readings of Twitter’s contract with Mr. Mask, damage will be limited to $1 billion.

Twitter and Mr. Musk have put together a team of lawyers to deal with this. Twitter’s head of operations in Delaware is William Sawitt, a lawyer for Wachtell, Lipton, Rosen & Katz. Wachtell Lipton is known, among other things, for developing legal tactics to protect companies from hostile buyers, such as the so-called poison pill which Twitter originally created to protect against Mr. Musk.

mr. Savitt has a background in the Delaware Court of Chancery and has previously defended companies against the likes of Carl Icahn and Pershing Square, an investment firm run by billionaire William Ackman. But Mr. Musk unlike any other corporate raider that preceded itwhich makes him a particularly difficult opponent.

mr. Musk’s legal team includes his personal lawyer, Alex Spiro, as well as lawyers from Skadden, Arps, Slate, Meagher & Flom. Skadden is a corporate law firm with extensive experience in Delaware court cases, including the case of luxury giant LVMH Mo√ęt Hennessy Louis Vuitton. cancel a $16 billion deal acquire Tiffany & Company. Skadden’s client LVMH ended up cutting its purchase price by around $420 million.

Mike Isaac provided reports and Jack Begg contributed to research.