Elon Musk Asks Judge To Halt Twitter Trial – Deadline

UPDATED with judge’s decision: The judge overseeing the Elon Musk–Twitter legal fight has just agreed to stay the trial, giving Musk until 5 pm on Oct. 28 to close the deal. Otherwise, she will set another trial date for next month. The proceedings had originally be set to begin on Oct. 17.

“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,” ruled Delaware Chancery Court Judge Kathaleen McCormick.

UPDATED with Twitter response: Elon Musk’s attorneys formally asked a judge to stay the trial set to start Oct. 17 after the Telsa CEO earlier this week agreed again to buy Twitter for $44 billion. Twitter opposed Musk’s motion, calling it “an invitation to further mischief and delay.”

The Musk team said a close would be possible “on or around Oct. 28,” which is after the trial date.

Twitter’s view is that Musk must close the deal before proceedings start on the 17th. “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. 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.”

Musk agreed to buy Twitter in April but pulled out of the deal in July, prompting Twitter to sue in Delaware Chancery Court. The proceedings under Judge Kathaleen McCormick have seemed to favor Twitter. Musk, who was scheduled to be deposed this week, sent a letter to Twitter renewing his offer to buy the company for the original price of $54.20 a share agreed on in April.

Twitter’s response to Musk back on Tuesday was that it also intended to consummate the deal at that price. But the social media company has been reluctant to end legal proceedings without guarantees given Musk’s previous about-face and questions over financing.

On the even of the trial, says Twitter, “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’s team insisted in a court motion filed this afternoon that “debt financing parties are working cooperatively to fund the close,” which is now expected “on or around Oct. 28.”

“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 says – this from reps of the billionaire who threw Twitter into turmoil by first agreeing to buy it, then pulling out of the deal, and who has spent months bashing the company’s business, integrity, prospects and leadership.

“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” and send a bad signal to the market, Musk’s legal team said.

Said Twitter: “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.”

“The merger should have closed long ago,” it added.

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