Social Media giant, Twitter Inc will get a five-day trial in October in its legal fight to hold Elon Musk to his $44 billion takeover bid. The decision was ruled after Judge Kathaleen St. J. McCormick said on Tuesday that the social media company deserved a quick resolution of the deal’s uncertainty.
Reuters reports that the ruling is a blow to Musk, who pushed for a trial in February to allow for an extensive investigation into his claims that Twitter has misrepresented the number of fake or spam accounts.
The question of whether Twitter’s user numbers are inflated is core to his argument that he can walk away from the deal. The social media company, which had requested a September trial, says the issue is a distraction and deal terms require Musk to pay up.
Also read: Twitter takes Elon Musk to court for bad faith and hypocrisy over $44 billion bid
Twitter had argued that delaying the trial into the next year could threaten deal financing.
Under the buyout agreement, Musk is obligated to finalise the deal within two days of all the closing conditions being met which would be early September explains Twitter’s attorney, William Savitt.
“Mr Musk has no intention of keeping any of his promises,” Savitt adds.
“The reality is delay threatens irreparable harm to the sellers,” she said, referring to Twitter.
Twitter shares were up 3.4% at $39.71 on Tuesday afternoon. According to News 24, Twitter stock had fallen as much as 22% since the day Musk tweeted that the deal was “on hold” in mid-May.
It hasn’t traded near the deal price since the first two weeks after the acquisition was announced.
The bots are angry at being counted ?
— Elon Musk (@elonmusk) May 14, 2022
Twitter wants McCormick to order Musk to complete the deal at the agreed price of $54.20 per share. It said it needed the earliest possible trial date in case Musk was ordered to close and additional litigation was then needed to address financing, which expires in April.
Musk had argued an expedited “warp speed” trial would allow Twitter to hide the truth about the number of bot and spam accounts, which Musk began questioning after signing the deal for Twitter in late April.
“When Mr Musk started asking questions, the answers he got were alarming,” said Andrew Rossman, Musk’s lawyer. He said it will take months to analyse massive amounts of data to resolve Musk’s questions about Twitter’s spam accounts.
In the hearing, Rossman argued that there was no need to rush the trial to meet the deal’s October deadline. The important date is when the financing commitments for the purchase expire, which is near the end of April 2023.
The argument is that a February trial would give the court enough time to decide the case and leave room for an appeal to which McCormick responds that Musk and his lawyers “underestimate the ability of this court to quickly process” complex legal disputes over merger-and-acquisition cases.
Musk is already facing a separate five-day trial before McCormick, starting on 24 October, over his record $56 billion pay package from Tesla.
Also read:
#RIPBusiLurayi – South African actress celebrated at memorial service
Picture: Twitter