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Elon Musk’s lawyers and the attorneys representing Twitter had their first opportunity to argue in court on Tuesday. This is as part of the dispute over whether the billionaire Tesla CEO should be compelled to complete the $44 billion purchase of the social media giant.
The timing of the trial is the subject of the hearing on Tuesday. Twitter (TWTR) also filed a motion to have the proceedings expedited and asked for a four-day trial in September. This is when it launched the lawsuit last week, days after Musk attempted to terminate the agreement. Musk’s legal team is opposing the motion.
William Savitt Attacking Musk For Swift Trial
At the beginning of the hearing, Twitter’s lead attorney William Savitt attacked Musk and pushed for a swift trial. According to Savitt, Twitter suffers harm “every day, every hour, due to the ongoing uncertainty surrounding the firm. It was caused by the unfinishing deal and legal action. Additionally, he cited what he claimed was Musk’s ongoing criticism of Twitter. This included remarks made on the company’s platform.
The stakes for Twitter are very high, even with this scheduling conflict. Prior to Musk’s engagement, the company was already having difficulty expanding its user base and advertising business. Now, as with many other internet firms, it is cutting costs due to rising inflation and concerns about a possible recession. To reduce uncertainty for its shareholders, staff, and customers. As well as any negative effects on its business that could be worsen by expensive, protracted litigation, Twitter needs a quick resolution to the conflict with Musk.
Although Tuesday’s hearing is primarily procedural in nature. It may provide insight into how each side will handle what is expected to be a convoluted legal process. It might also provide us a look into the mindset of the case’s chief judge, Kathaleen St. Jude McCormick. He is the judge of the Delaware Court of Chancery.
Twitter Filing a Lawsuit
A minor problem in the case already exists: Although the hearing was initially happening to occur in person, McCormick informed the two parties in a letter that she had tested positive for Covid-19. And would be switching the hearing to Zoom on Monday.
Musk made the decision to end the accord less than three months after the groundbreaking acquisition deal was signed. In addition to allegedly withholding information that Musk claims is necessary for him to assess the scope of the problem, he charged Twitter with breaking the terms of the agreement by misrepresenting the number of bot and spam accounts present on the site.
In retaliation, Twitter filed a lawsuit last week that was over 60 pages long and claimed Musk was the one who had broken the terms. Twitter claimed in the lawsuit that Musk is using bots as a cover to try to back out of a deal. Over which he now has buyer’s remorse after the market crash that has caused Twitter shares as well as Tesla (TSLA) shares, which the billionaire is relying on in part to finance the deal, to tank, to drop.
Twitter wants Musk to follow through on the purchase
Twitter urged the court to order Musk to execute the purchase agreement of the business. However, despite the fact that the majority of legal experts believe Twitter has the stronger case, some believe the firm may ultimately reach a settlement with the billionaire to lessen the interruption to its operations if the case starts to drag on.
In line with the general disagreement in the case, Twitter and Musk don’t seem to agree on a quick trial. In its motion, Twitter stated that the expedition is required to ensure that the deal can be completed before the “drop dead” date of October 24, which the two parties previously agreed to close the deal by, as well as to “protect Twitter and its stockholders from the continuing market risk and operational harm resulting from Musk’s attempt to bully his way out of an airtight merger agreement.”
Twitter is still making preparations to move forward with the acquisition in the interim. According to a regulatory filing, the business on Friday addressed a letter to shareholders. This is requesting their support for the sale of Twitter to Musk for $54.20 per outstanding share. This was happening in special meeting later this year. Previously, the board of Twitter unanimously recommended that shareholders approve the transaction. And it restated that recommendation in the letter.
The Friday letter notes that despite Musk’s attempt to scuttle the agreement. We are committed to finalizing the merger on the price and terms agreed upon with Mr. Musk.” “The outcome of your vote at the special meeting will determine whether we can conclude the merger.”