Twitter vs Musk: Judge orders October trial

A US judge on Tuesday set the start of the Twitter trial against Elon Musk in October for five days, thereby granting the social network’s request for a speedy trial.

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The platform last week filed lawsuits against the head of Tesla and SpaceX to force him to honor his commitment to acquire it for $44 billion.

Twitter had requested an accelerated procedure in September so as not to prolong the period of uncertainty that is partially paralyzing the company.

Judge Kathaleen McCormick, president of a commercial law court in Delaware (Northeast), acknowledged that “delays could cause irreparable harm to Twitter.” She also mentioned that it was not certain that Elon Musk’s compensation payment would be enough to make up for the damage suffered.

The hearing was held via Zoom as the judge has COVID.

Elon Musk’s lawyers appealed Friday to prevent hostilities from opening before next year. They assert that the experts need to analyze “mountains of data” to prove, as the multi-billionaire claims, that the platform is riddled with automated accounts and spam, far in excess of the 5% officially quoted.

This is the reason given by Elon Musk for the unilateral termination of the agreement to take over the social network, which he considers a “public place” essential to “democracy”.

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“This issue, which Musk says requires complex review, is a manufactured problem designed to complicate things and cause delays,” argued Twitter attorney William Savitt. “The merger agreement doesn’t even mention that bots or spam,” he insisted.

“We suspect that Mr. Musk wants to delay this process long enough to never be held accountable. […] He knows that in such circumstances, belated justice is often no justice. He even hopes so,” he said.

Despite going through an image crisis after months of being attacked and slandered by her ex-beau, the platform is the favorite in this showdown.

“Twitter’s shares have been in good shape” since the complaint was filed, noted Dan Ives, an analyst at Wedbush Securities. “It seems many investors who have read it have concluded that this Game of Thrones court showdown will end in a Twitter victory.”

By “victory,” the expert means a judge’s decision that would force Elon Musk to buy the company at the price agreed at the end of April ($54.20 per share) or pay significant damages.

The chances that he will just get away with the severance pay ($1 billion) or be declared his rights are considered very slim.

“Free Electron” Musk

Litigation depends on the Delaware Court of Chancery, whose President Kathaleen McCormick – the first woman to hold the position – took the case.

“She is a very serious judge who is not intimidated by any party. […] In the past, she has not been affectionate towards those who show bad faith,” said Adam Badawi, law professor at the University of Berkeley.

In his complaint, Twitter accused Elon Musk of showing “hypocrisy” and “bad faith.”

The company’s lawyers believe he has changed his mind given the recent drop in stock market valuations of technology companies.

Kathaleen McCormick is best known for forcing Kohlberg, a company that had also been trying to break off an engagement, to buy the company in question, DecoPac.

The fate of bluebird, a social network used by politicians, celebrities, activists and influencers worldwide, seems to have little in common with that of less prominent organizations.

But “I don’t think it’s different enough that Delaware is risking its reputation by choosing not to apply the terms of the agreement,” says Adam Badawi.

The multi-billionaire and the board of directors can still agree on a slightly lower price and thus avoid the lawsuit.

“But that would be rational thinking,” notes Adam Badawi, referring to Elon Musk’s unpredictability. In another case heard in Delaware, Elon Musk “has shown his willingness to go all the way,” the professor adds. “And he won. I don’t think his instinct is necessarily to agree.”

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