Twitter will face a lawsuit in October in a legal battle to keep Elon Musk in its $44 billion (AU$64 billion) takeover after a Delaware judge said the social media company deserved a quick resolution of the deal’s uncertainty .
Tuesday’s decision is a blow to Musk, who pushed for a trial in February to conduct an extensive investigation into his claims that Twitter misrepresented information. .
The question of whether Twitter’s user count is inflated is key to his claim that he may back out of the deal. The company, which requested a lawsuit in September, says the issue is a distraction and the terms of the deal require Mr Musk to pay up.
Twitter argued that postponing the trial to next year could jeopardize the financing of the deal.
Chancellor Kathleen McCormick of the Delaware Court of Chancery said on Tuesday the company deserves a speedy decision on its claims.
“The reality is that the delay threatens to cause irreparable harm to sellers,” she said, referring to Twitter.
Ms McCormick asked the parties to develop a timetable for the trial, which she said would last five days.
A lawyer for Mr. Musk, who is also the chief executive of electric car maker Tesla, did not respond to a request for comment.
“We are pleased that the court has agreed to expedite this trial,” a Twitter spokesperson said.
Twitter wants Ms. McCormick to order Mr. Musk to complete the deal at the agreed price of $54.20 (AU$78.57) per share. It said they wanted a trial date as early as possible in case Mr Musk was ordered to close the case and then required additional litigation to resolve the funding issue, which expires in April.
Twitter lawyer William Savitt argued during the hearing that Musk seized on the problem of bots and spam accounts because he sought to “think of a way out of a deal that doesn’t have one.”
Mr. Musk’s lawyer dismissed the idea that Mr. Musk was trying to harm Twitter, pointing out that the billionaire owns a larger stake than the combined assets of Twitter’s directors.
Mr. Musk argued that the fast track trial would allow Twitter to cover up the truth about the spam accounts, which Mr. Musk began questioning after signing a deal with Twitter in late April.
“When Mr. Musk started asking questions, the answers he got were alarming,” said Andrew Rossman, Mr. Musk’s lawyer.
He said it would take months to analyze the massive amounts of data to answer Mr. Musk’s questions about spam Twitter accounts.
Mr Musk is already facing a separate five-day trial before Ms McCormick starting Oct. 24 over his record $56 billion (AU$81 billion) payout package from Tesla.