Twitter Shareholders Approve Elon Musk Takeover Despite Lawsuit

Billionaire Elon Musk is still trying to back out of his deal to buy Twitter with the lawsuit scheduled for next month.

The Tesla CEO has been pretty vocal about his skepticism about the platform's bot and spam accounts, alleging that the number of "fake" accounts is much higher than reported. He used that to justify backing out of the $44 billion dollar deal, but it's up to a judge to have the final say.

On Tuesday, company shareholders gathered together for a special meeting to vote on whether or not they approved selling the company to Musk despite his protests... and they did.

As The Hollywood Reporter noted, the special meeting of shareholders occurred on Tuesday, September 13. In that meeting, Twitter shareholders approved selling the company to the SpaceX founder for $54.20 per share, which is the initial deal that Musk had offered to Twitter chair Bret Taylor earlier this year.

Although the approval was expected, it was an important legal step ahead of next month's lawsuit, given that regulators have already signed off on the deal.

In April, Twitter's board agreed to sell the company to Musk only a few weeks after he became the company's then-largest shareholder. The company's stocks have plummeted since that time, leading many to speculate that Musk was regretting his deal to purchase the company.

In July, the billionaire sent a letter to terminate the agreement. Although a one billion dollar “break-up fee” was written into the contract, the social media giant claims that the clause doesn’t apply in this case and is looking for a judge in Delaware Chancery Court to force Musk to go through with their deal.

In late August, Deadline reported that Musk decided to subpoena Twitter founder and former CEO Jack Dorsey as subpoenas continue to fly on both sides.

The subpoena states that Dorsey is “hereby commanded, all business and excuses being laid aside, to respond in writing to this subpoena and to produce for inspection and copying the books, documents, or tangible things in your possession, custody, or control” requested by Musk's team.

Dorsey will also be required to hand over any information about the merger agreement and any documents “reflecting, referring to, or relating to the impact or effect of false or spam accounts on Twitter’s business and operations.”

It remains to be seen if Dorsey will be able to turn over any information that will sway Musk - or a judge's - opinion on bot and spam accounts. In mid-July, Judge Kathaleen McMcormick set a tentative five-day trial scheduled to take place in October.

The social media company had originally asked for a hearing to take place this month, while Musk's legal team argued that they needed to delay the trial until at least February 2023 to gather enough time to gather all necessary documents and information.

Attorneys representing the social media company argued that a delay could cause the company "irreparable harm" and Judge McCormick agreed, scheduling a court date for October 2022. Financial analysts have speculated that it's still possible the two parties will be able to settle the matter out of court.