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Twitter vows legal battle after Musk deal pullout
STORY: Twitter has vowed to take legal action against Elon Musk after the Tesla CEO said he was pulling out of the $44 billion dollar deal to buy the social media company.Musk said Friday that he was terminating the deal because Twitter had breached multiple provisions of the merger agreement.In a filing, Musk’s lawyers said Twitter had failed or refused to respond to multiple requests for information on fake or spam accounts on the platform.After that – Twitter’s chairman, Bret Taylor, said in a tweet the board planned to pursue legal action to enforce the agreement.Musk’s actions likely sets up a protracted legal fight with Twitter.However, Boston College law professor Brian Quinn dismissed Musk’s arguments for an exit.”Those are going to be hard arguments to make. One, that he thinks the bots are more than 5%, as Twitter has disclosed in its SEC filings, and that as a result, he says, constitutes a material adverse effect. That would be a thing that it’s a condition that would permit him to walk away from the transaction without paying a fee. That’s, I think, really debatable. His argument there is very pretextual, I think. His second argument with respect to the bots is that he requires additional information about the bots in order to communicate with his his financing parties, and that he argues that Twitter has not given him enough information. So I don’t give him much hope with that one either, but, you know, the judge has to decide.”Disputed deals that end up in Delaware courts often end up with companies re-negotiating deals or the buyer paying the target a settlement to walk away since target companies often want to move on.There is plenty of precedent to renegotiate a dealas several companies did during the height of the global health crisis.In 2020, the French retailer LVMH threatened to walk away from a deal with Tiffany & Company, eventually the two agreed to take more than $400 million dollars off the price.According to a person familiar with the matter, Twitter is hoping that court proceedings will start in a few weeks and be resolved in a few months.
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