$Tesla Motors(TSLA)$ CEO Elon Musk and $Twitter(TWTR)$'s legal team launched the first hand-to-hand combat, but Musk lost the first game, and the judge ruled that the Twitter acquisition case should be resolved quickly.Chief Judge Kathaleen McCormick of the Delaware Court of Chancery ruled that the case will undergo a five-day fast-track trial in October this year, rejecting Musk’s request for another hearing next year. The result is closer to Twitter's demands, which had previously called for a 4-day fast-track trial in September.
Justice Katherine said in her ruling that generally, the longer a merger deal is pending, the greater the uncertainty the seller faces and the greater the risk of irreparable harm.
Twitter’s lawyer, William Savitt, also said at the hearing that the company’s request for a fast-track trial was in line with the timelines of previous cases, and that it was necessary to enter the fast-track review process in order to prevent Musk from pulling out of the deal and continuing to derogate from the company’s continued harm.
Musk's lawyer Andrew Rossman said that this time is not enough to review the massive data of Twitter, and Musk hopes to prove the percentage of spam accounts on the platform. Rossman accused Twitter of wanting a quick trial in order to continue its "coverup."
Savitt countered, however, that juggling the percentage of junk accounts was unnecessary in this case because nothing in the merger agreement addressed the issue.
Rossman stressed at the hearing that the key juncture in the case is April next year, when the financing commitments for the acquisition will expire. At the same time, Musk is also the second largest shareholder of Twitter, and there is no reason to hurt the company at all.
SHARE YOUR THOUGHTS
What Will be the Result?
You may be rewarded with Tiger Coins for sharing your thoughts in the comment💸💸💸
Follow me! Don't forget I am the richest tiger in this community😎😎
Comments
Round 1 goes to Twitter who was able to convince Head Judge Kathaleen McCormick to fast track the Twitter Trial to 5 days in October this year.
Elon Musk has reason to worry about Judge McCormick as she has a no nonsense reputation as well as the distinction of being one of the few judges who has ever ordered a reluctant buyer to close a US corporate merger.
In the case of DecoPac Holdings, Judge McCormick ruled in favour of the seller and ordered the buyer to close on the purchase agreement.
Twitter is suing Elon Musk for "specific performance" in which Musk can be forced to buy Twitter. In the event if the Judge ruled in Twitter's favour, financial seizure is a possibility as Tesla and SpaceX are both incorporated in Delaware.
Ultimately it is definitely in both parties' favour to settle the litigation out of court. But for now, I believe Twitter has the edge over Elon Musk especially with Judge McCormick presiding over the case.
@MillionaireTiger @TigerStars
A five-day fast-track and only one trial for Twitter’s lawsuit against Elon Musk over their $44 billion acquisition agreement in October this year will place Elon Musk in a disadvantage position which is also out of his expectation.
Elon Musk is considered to have lost the first game as the judge ruled that the Twitter acquisition case should be resolved quickly.
Twitter needs a swift resolution to the battle with Musk in order to limit the uncertainty for its shareholders, employees and customers, and any fallout for its business that could be exacerbated by costly, prolonged litigation.
I believe Elon Musk will be left no other choice but to opt for out of court settlement and settle to buy Twitter at a less than the agreed price of USD 54.20 per share. As of 20 July 22, Twitter price has dropped to USD 39.52.