Twitter sues Elon Musk to enforce original merger deal

Twitter filed a lawsuit against Elon Musk in the Delaware Court of Chancery on Tuesday after the billionaire said he was canceling his $44 billion deal to buy the company.

Twitter reported that Musk, after entering into a binding merger agreement, now “refuses to honor his obligations to Twitter and its shareholders because the deal he signed no longer serves his self-interest.”

Twitter lawsuit expected after Musk said at the end of last week that he no longer plans to buy the social network, citing bots on Twitter and claiming that the company did not provide him with the information necessary to evaluate the transaction.

The lawsuit, filed on Tuesday, marks the beginning of what could become a drawn-out legal battle as Twitter attempts to force Musk to honor its $54.20 per share deal, and as Musk seeks to pull out of the deal.

The outcome of the dispute can be unpredictable, legal experts sayand could include forcing Musk to complete the deal or forcing him to pay a $1 billion gap fee, or other scenarios including a settlement, a renegotiation of the purchase price, or even Musk leaving without paying anything.

Twitter is seeking a four-day trial in September, according to a court filing.

In a lawsuit filed on Tuesday, Twitter alleged that Musk’s behavior during his harassment of the social network was “in bad faith” and accused the Tesla CEO of acting against the deal as “the market began to change.”

“By putting on a public spectacle to put Twitter in the game, and by proposing and then signing a seller-friendly merger agreement, Musk appears to believe that he—unlike any other party subject to Delaware contract law— — is free to change its mind, the company, disrupt its activities, destroy shareholder value and leave,” Twitter said in a complaint.

“This denial follows a long list of material breaches of contract by Musk that have cast a shadow over Twitter and its business,” Twitter’s lawsuit says.

The lawsuit alleges that what Musk says about why he wants to end the deal, including the prevalence of bots on the service, is a “pretext.”

Musk announced plans to buy Twitter for $54.20 a share in April. At Tuesday’s close, the stock was trading at just over $34 a share, more than 37% lower than Musk’s offer.

Twitter attributed the decline in part to Musk’s actions, although stock prices of other social media companies also declined over the same period.

“Since the signing of the merger agreement, Musk has repeatedly made disparaging remarks about Twitter and the deal, creating business risks for Twitter and lowering its share price,” Twitter’s lawsuit says.

Twitter filed a lawsuit to “hold Elon Musk accountable for his contractual obligations,” Twitter Chairman Bret Taylor said in a statement. tweeted.

“Oh what an irony lol” – Musk tweeted after a Twitter feed.