On Tuesday in October, Twitter and Elon Musk were sued over whether Tesla was main may be forced to complete its $44 billion deal to buy the social network, an early win for a platform plagued by uncertainty.
A judge in the eastern U.S. state of Delaware ruled against Musk’s proposal for a February date, while keeping a close eye on Twitter’s desire to speed up the schedule.
Billions of dollars are at stake, but so is the future of the platform, which Musk says should allow any legal speech, an absolutist stance that has raised fears that the network could be used to incite violence.
“We call on the court to put in place an operational timeline and give multiple reasons for doing so,” Twitter attorney William Savitt said, noting that “the ongoing uncertainty caused by Musk’s proposed firing is hurting Twitter every day, every hour of every day.”
Musk’s team has vehemently opposed the expedited trial date, saying Twitter’s preferred September date was too fast for such a complex issue.
The judge did not set an exact date, leaving the parties to agree on a date.
Twitter lawyers noted that the deal should close by the end of October, just six months after Musk filed an unsolicited bid that the company’s board of directors initially opposed but then backed.
The world’s richest man backed out of a deal in recent months as tech stocks tumbled and Twitter’s value fell well below the $54.20 a share he offered.
– Mask’s readiness for battle –
Instead of Silicon Valley, where Twitter is based, the company filed suit against Musk in Delaware.
The firm is registered in the tiny state, like many other companies, and the case will be heard in the Delaware Court of Chancery, which has extensive experience in resolving business disputes.
“The Court of Chancery, which handles most of these cases, is very knowledgeable in corporate law, in particular mergers and acquisitions. So this is the place to go,” said Carl Tobias, professor of law at the University of Richmond.
Kathleen McCormick, the judge overseeing this case, has a serious reputation.
She also reportedly has the honor of previously ordering a reluctant buyer to complete a corporate merger.
A forced shutdown of the Twitter deal is a scenario that some analysts see as a possibility.
“(Wall) Street and lawyers across the board believe Twitter has a ‘strong iron fist’ heading into the Delaware legal battle after months of this debacle and nightmare,” analyst Dan Ives wrote last week.
He also noted that less likely options include Musk paying a $1 billion fine and walking away or winning outright in the fake account dispute.
After the deal was suspended in May, Musk’s lawyers announced in July that he was “terminating” the agreement due to skepticism about counting fake or spam Twitter accounts and allegations that the firm had not provided details.
Tuesday’s hearing will be just the first step in a lengthy legal battle that could end in litigation as well as a settlement.
“Musk has shown his willingness to go all the way in the Delaware court,” said Adam Badawi, professor of law at the University of California at Berkeley.
“I think settlement is not necessarily his instinct.”