Twitter on Tuesday sued SpaceX and Tesla CEO Elon Musk in a Delaware Court of Chancery for violating the $44 billion deal to buy the social media platform.
Moments after news of an indictment against Musk surfaced online on Twitter, Tesla’s CEO took to the microblogging site and simply tweeted, “Oh the irony lol” without reference to the legal action being launched against him.
oh the irony lol
— Elon Musk (@elonmusk) July 12, 2022
For the inexperienced, Musk had made a definitive deal with Twitter in April 2022 to acquire the microblogging platform for about $44 billion.
But the deal was put on hold in May 2022 due to pending data, supporting the microblogging site’s claim that less than 5% of daily active users are automated spam accounts.
Last Friday, however, Musk informed Twitter of his decision in a letter from his lawyers to end the deal for breach of “multiple provisions of the agreement,” according to a regulatory filing.
Musk accused the company of denying his request to release information about spam accounts on the platform, which he said amounted to a “material adverse event”.
He said the information on such accounts was fundamental to Twitter’s business performance and he had previously warned that the deal would be suspended if he doesn’t get the required data.
In response to the deal’s termination, Twitter filed a lawsuit against Musk in the Delaware Court of Chancery on Tuesday “to hold Elon Musk accountable for his contractual obligations.”
The lawsuit accused Musk of “bizarre” and “bad faith” actions, as well as “a long list” of merger agreement violations that have caused irreversible damage to the platform and “wreak havoc” on the stock price.
Twitter’s lawsuit begins with an allegation that “Musk is refusing to honor his obligations to Twitter and its shareholders because the deal he signed no longer serves his personal interests.”
It added: “After mounting a public spectacle to bring Twitter into play and proposing and then signing a seller-friendly merger agreement, Musk apparently believes that — unlike any other party subject to Delaware contract law — he – is free of his mind, pollute the company, disrupt its activities, destroy shareholder value and walk away.
“Twitter is taking this action to prohibit Musk from committing further infringements, to compel Musk to comply with its legal obligations, and to force the completion of the merger when the few outstanding conditions are met.”
Under the terms of the original merger agreement in April, Musk and Twitter had agreed to pay each other a $1 billion severance payment if either one was responsible for the deal’s failure. Twitter has asked the Delaware court to order Musk to complete the agreed-upon merger at the agreed-upon $54.20 per Twitter share.
Apparently, the lawsuit that Twitter has filed consists of 62 pages and has mentioned about 13 tweets from Elon Musk.
So far, no judge has been appointed for the case. The microblogging platform hopes to start the case on September 19.