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Court battle begins in Musk, Twitter takeover battle

#Court #battle #begins #Musk #Twitter #takeover #battle

The high-stakes court battle between Elon Musk and Twitter began Tuesday as the social media firm seeks to force the entrepreneur to honor its $44 billion buyout deal.

The first hearing focused on Twitter’s push to set a trial date back in September, in a case centered on Musk’s move to back down over allegations the platform misled him about its list of fake accounts.

Billions of dollars are at stake, as is the future of the platform, which Musk has said should allow any legal speech, an absolutist position that has raised fears the network could be used to incite violence.

The hearing is taking place in the eastern state of Delaware.

“Questions have been raised about the future of Twitter, and they don’t want this to drag on for too long,” said Carl Tobias, a law professor at the University of Richmond.

Musk’s legal team has filed papers arguing that the date is far too early for such a complex matter, proposing mid-February instead.

Twitter attorneys noted that the deal is set to close toward the end of October, just six months after Musk made an unsolicited offer that the company’s board of directors initially rejected but then backed.

The world’s richest person has backed out of the deal in recent months as tech stocks have plummeted and Twitter’s value has fallen well below the $54.20 per share it was offering.

– Musk combat readiness –

Instead of Silicon Valley, where Twitter is based, the company has filed its lawsuit against Musk in Delaware.

The firm, like many other corporations, is incorporated in the tiny state and the case is being tried in the Delaware Chancery Court, which has extensive business litigation experience.

“The Chancery Court, which deals with most of these matters, is very experienced in corporate law and in the area of ​​mergers and acquisitions in particular. So this is the place for you,” added Tobias.

Kathaleen McCormick, the judge overseeing the case, has a no-nonsense reputation.

She also reportedly has the distinction of having previously asked a reluctant buyer to complete a corporate merger.

A forced closure of the Twitter deal is a scenario some analysts believe is possible.

“(Wall) Street and legal experts across the board see Twitter as a ‘strong iron fist’ headed into the Delaware court battle after months of this fiasco and nightmare,” analyst Dan Ives wrote last week.

He also noted that less likely options include Musk paying a $1 billion breakup fee and being able to walk away, or winning his fake account argument outright.

After the deal was halted in May, Musk’s lawyers announced in July that he was “terminating” the agreement due to skepticism about Twitter’s bogus or spam accounts and allegations that the company had failed to share details.

Tuesday’s hearing will be just the first step in a potentially lengthy legal battle that could end in a trial but also in a settlement.

“Musk has shown his willingness to see things through to the end in Delaware court,” said Adam Badawi, a law professor at the University of California, Berkeley.

“I think it’s not necessarily his instinct to settle down.”

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#Court #battle #begins #Musk #Twitter #takeover #battle

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