Elon Musk can use whistle-blower claims in Twitter trial, judge rules
But judge denies the billionaire’s request to delay the trial over his attempt to abandon $44bn deal
07 September 2022 - 18:55
byTom Hals
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Wilmington — Elon Musk’s can use a whistle-blower’s claims in his legal case against Twitter, but the billionaire cannot delay the trial over his attempt to walk away from his $44bn deal for the company, a judge ruled on Wednesday.
“I am convinced that even four weeks’ delay would risk further harm to Twitter,” wrote chancellor Kathaleen McCormick of Delaware’s Court of Chancery, in affirming the trial will start in October.
Shares of Twitter rose about 4% in early on Wednesday trading to $40.15.
“We are hopeful that winning the motion to amend takes us one step closer to the truth coming out in that courtroom,” said Alex Spiro, an attorney for Musk, in a statement.
Musk’s legal team argued on Tuesday that justice demanded delaying the five-day trial so Musk could investigate claims by whistle-blower Peiter Zatko, known as “Mudge,” that Twitter hid weaknesses in its security and data privacy.
Musk’s initial case against Twitter claimed the company misrepresented the prevalence of spam or bot accounts on the platform.
Last month, Zatko’s allegations became public and provided Musk fresh ammunition to bolster what legal experts said was a long-shot attempt to walk away without paying a $1bn termination fee.
“We look forward to presenting our case in court beginning on October 17th and intend to close the transaction on the price and terms agreed upon with Mr Musk,” said a statement from Twitter spokesperson.
In July, Twitter sued Musk, who is also CEO of electric vehicle maker Tesla to hold him to his April agreement to buy the company for $54.20 per share. The company has alleged that Musk got cold feet over the deal as global politics and inflation rattled markets soon after the deal was signed.
At Tuesday’s hearing, Twitter’s lawyer read a message from Musk that came to light during the litigation that the lawyer said showed the billionaire was not actually concerned about spam accounts.
Musk sent a message to a Morgan Stanley banker in May, as Russia’s President Vladimir Putin was warning the West over his country’s war in Ukraine, that read “it won’t make sense to buy Twitter if we’re heading into World War III.”
The deal contract allows Musk to walk away under certain narrow conditions, although a war is specifically excluded.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Elon Musk can use whistle-blower claims in Twitter trial, judge rules
But judge denies the billionaire’s request to delay the trial over his attempt to abandon $44bn deal
Wilmington — Elon Musk’s can use a whistle-blower’s claims in his legal case against Twitter, but the billionaire cannot delay the trial over his attempt to walk away from his $44bn deal for the company, a judge ruled on Wednesday.
“I am convinced that even four weeks’ delay would risk further harm to Twitter,” wrote chancellor Kathaleen McCormick of Delaware’s Court of Chancery, in affirming the trial will start in October.
Shares of Twitter rose about 4% in early on Wednesday trading to $40.15.
“We are hopeful that winning the motion to amend takes us one step closer to the truth coming out in that courtroom,” said Alex Spiro, an attorney for Musk, in a statement.
Musk’s legal team argued on Tuesday that justice demanded delaying the five-day trial so Musk could investigate claims by whistle-blower Peiter Zatko, known as “Mudge,” that Twitter hid weaknesses in its security and data privacy.
Musk’s initial case against Twitter claimed the company misrepresented the prevalence of spam or bot accounts on the platform.
Last month, Zatko’s allegations became public and provided Musk fresh ammunition to bolster what legal experts said was a long-shot attempt to walk away without paying a $1bn termination fee.
“We look forward to presenting our case in court beginning on October 17th and intend to close the transaction on the price and terms agreed upon with Mr Musk,” said a statement from Twitter spokesperson.
In July, Twitter sued Musk, who is also CEO of electric vehicle maker Tesla to hold him to his April agreement to buy the company for $54.20 per share. The company has alleged that Musk got cold feet over the deal as global politics and inflation rattled markets soon after the deal was signed.
At Tuesday’s hearing, Twitter’s lawyer read a message from Musk that came to light during the litigation that the lawyer said showed the billionaire was not actually concerned about spam accounts.
Musk sent a message to a Morgan Stanley banker in May, as Russia’s President Vladimir Putin was warning the West over his country’s war in Ukraine, that read “it won’t make sense to buy Twitter if we’re heading into World War III.”
The deal contract allows Musk to walk away under certain narrow conditions, although a war is specifically excluded.
Reuters
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