A judge has delayed a looming trial between Twitter and Elon Musk, giving Musk more time to close his $44 billion deal to buy the company after months spent fighting to get out of it.
Chancellor Kathaleen St. Jude McCormick, head of the Delaware Chancery Court, said Thursday that Musk has until Oct. 28 to close the deal. A trial set for Oct. 17 will happen in November if he doesn’t, she said.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Twitter is asking a Delaware court to proceed with an upcoming trial against Elon Musk, saying the billionaire refuses to accept the “contractual obligations” of his April agreement to buy the social media company for $44 billion.
Twitter attorneys sent a letter Thursday to the Delaware Chancery Court’s head judge, not long after Musk’s legal team asked her to call off the trial while he works on a renewed bid to buy the company.
Twitter disputed Musk’s claim that the San Francisco-based company is refusing to accept the new bid, which Musk told the company about earlier this week after trying to terminate the deal over the summer.
The company has been seeking a court order to force the completion of the merger and said it intends to close the deal at the agreed-upon price, but described Musk’s move to delay the trial as “an invitation to further mischief and delay.”
Twitter said Musk should be aiming to close the deal by Monday, ahead of a trial set to begin a week later on Oct. 17.
“But they aren’t. Instead they refuse to commit to any closing date,” said the letter from Twitter lawyer Kevin Shannon. “They ask for an open-ended out, at the expense of Twitter’s stockholders (who are owed $44 billion plus interest), all the while remaining free to change their minds again or to invent new grounds to avoid the contract.”
Brooklyn Law School professor Andrew Jennings said Twitter wants to be certain that the deal will get done and not allow "wiggle room for Musk to walk away again."
Twitter apparently hasn't got the certainty it wants.
“Otherwise, we would’ve seen a joint filing to the court on how the two sides want to proceed,” Jennings said. "As of right now, the trial train keeps rolling until both parties or the court apply the brakes.”
Musk’s attorneys said earlier Thursday that the trial should be adjourned to leave more time for Musk to secure the financing.
“Twitter will not take yes for an answer,” said the court filing signed by Musk attorney Edward Micheletti. “Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders’ interests.”
Eric Talley, a Columbia University law professor, tweeted Thursday that Twitter “is absolutely right not to take ‘yes’ for an answer, and everyone knows why. (They tried that in April and it didn’t go so well).” He added that Twitter would, however, take a “certified bank transfer” from Musk.
Musk attorneys argue that Twitter is disagreeing with the trial delay “based on the theoretical possibility” of Musk not coming up with the financing, which they call “baseless speculation.”
They said Musk’s financial backers “have indicated that they are prepared to honor their commitments” and are working to close the deal by Oct. 28, roughly a week after the trial was set to conclude.
Twitter’s shares fell $1.91, or 3.7%, to close at $49.39 on Thursday. It was the stock's second day of declines following a surge of more than 22% on Tuesday after Musk made his renewed offer to buy the company.
Source: Read Full Article