The ongoing drama between billionaire Elon Musk and Twitter is far from over.
Although the Tesla CEO recently announced that he was ready to buy the company after a back-and-forth legal battle that has been going on for months, Twitter did not agree to drop the lawsuit against him, hoping that a judge will compel him to follow through with his verbal admission.
The 51-year-old billionaire then asked for a stay of trial in order to get their affairs in order. Although Twitter objected to the delay, Delaware Chancery Court Judge Kathaleen McCormick ruled that the trial will indeed be pushed back to the end of the month.
Elon Musk Granted Trial Stay As Twitter Lawsuit Looms
Although the proceedings had been scheduled to begin in Delaware Chancery Court on Monday, October 17, Judge McCormick allowed the trial to be stayed until the end of the month (via Deadline). She is giving Musk until Friday, October 28, at 5 PM ET to close the deal with Twitter. If the two parties are unable to reach an agreement by that time, another trial date will be scheduled for November 2022.
In a court filing, Delaware Chancery Court Judge Kathaleen McCormick ruled, “This action is stayed until 5 p.m. on October 28, 2022, to permit the parties to close on the transaction. If the transaction does not close by 5 p.m. on October 28, 2022, the parties are instructed to contact me by email that evening to obtain November 2022 trial dates.”
Twitter Slams Elon Musk, Expects Him To Cause ‘Further Mischief and Delay’
Before the judge had made her ruling, Twitter had balked at Musk’s suggestion to ask a judge to stay the trial date. Although Musk verbally agreed to buy Twitter again for the original price of $44 billion dollars, board members were understandably cautious about Musk’s sudden change of heart, given that he has been flip-flopping on whether or not to buy the social media giant since they struck the original deal in April.
Twitter had formally opposed Musk’s motion to stay the trial date, calling it “an invitation to further mischief and delay.” Musk’s team had said that it would be possible for them to close “on or around Oct. 28,” which was about two weeks after the initial trial date.
Twitter was hoping that a judge would rule that proceedings would start on October 17 as scheduled. In a court filing, attorneys representing the social media company said, “At a minimum…Defendants should be arranging to close on Monday, October 10. But they aren’t. Instead they refuse to commit to any closing date. They ask for an open ended out, at the expense of Twitter’s stockholders (who are owned $44 billion plus interest), all the while remaining free to change their minds again or to invent new grounds to avoid the contract.”
“Until Defendants commit to close as required, Twitter is entitled to its day in Court, to demonstrate its entitlement to specific performances and prove Defendants’ breaches so as to ensure complete relief in the event the closing should for any reason not occur,” the statement continued. “Defendants can and should close next week. Until they do, this action is not moot [as Musk’s motion insisted] and should be brought to trial.”
The Tesla CEO Changed His Mind Shortly Before He Was About To Be Deposed
Many were curious as to the timing of Elon Musk’s sudden change of heart, which came only days before he was about to be deposed. Instead, he sent Twitter a letter agreeing to buy the company for the original price of $54.20 per share that they had agreed upon back in April. As soon as the news was made public, Twitter shares soared and were halted several times.
Still, Twitter shareholders are understandably nervous that Musk may change his mind yet again and try to find a new way to back out of the trial. As reps for Twitter said, “Defendants declare they intend to close after all. ‘Trust us,’ they say, ‘We mean it this time,’ and so they ask to be relieved from a reckoning on the merits.”
Musk insisted that his “debt financing parties are working cooperatively to fund the close,” which is now expected “on or around Oct. 28.” Attorneys for Elon Musk added, “As a result, there is no need for an expedited trial to order the Defendants to do what they are already doing and this action is now moot.”
“Yet Twitter will not take yes for an answer. Astonishingly, they have insisted on proceeding with this litigation, recklessly, putting the deal at risk and gambling with their stockholders interests,” the motion added. “Proceeding towards trial is not only an enormous waste of party and judicial resources, it will undermine the ability of the parties to close the transaction.”
However, Twitter fired back, saying, “The obstacle to terminating this litigation is not, as Defendants say, that Twitter is unwilling to take yes for an answer. The obstacle is that Defendants still refuse to accept their contractual obligations.” They added, “The merger should have closed long ago.”