After Elon Musk agreed to buy Twitter after all, his legal team is now motioning for the court to cancel the upcoming trial with Twitter, slated to begin on October 17.
But, as Judge Kathaleen McCormick pointed out yesterday, the trial cannot be called off until both parties agree. So, the trial is still technically moving forward unless Twitter also motions for a stay. Twitter has not yet lowered its guard, though, because Musk still needs to come up with $44 billion.
The letter from Musk’s legal team states that they expect the acquisition to close around October 28, assuming that all goes according to plan.
“Twitter will not take an answer,” the letter reads. “Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with stockholders interests. Proceeding with this trial is not only an enormous waste of party and judicial resources, it will undermine the ability of the parties to close the transaction.”
Musk was supposed to be scheduled for deposition last week, but he was able to delay the event, citing a potential COVID-19 exposure. His testimony was originally rescheduled for today, but he managed to delay it again. It seems that his team is pulling out all of the stops to prevent the business mogul from having to testify under oath.
“Although Twitter resists a stay based on the theoretical possibility of a future failure to obtain the Debt Financing, no such failure has occurred to date,” the filing continues. “Not only has Twitter’s baseless speculation been refuted by the banks themselves, any theoretical claims Twitter could concoct based on a potential financing failure that has not happened are unripe and unpled, making them well outside the scope of the trial set to begin in eleven days.”
Though Musk’s team has expressed confidence in its ability to close the deal, Reuters has reported this week that two potential backers of the deal, Apollo Global Management and Sixth Street Partners, are no longer in talks with Musk.
A few hours after Musk’s team motioned to stay, Twitter filed an opposition to the motion.
“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,” Twitter’s letter reads.
“For months, Defendants have pursued increasingly implausible claims and over and over sought to delay trial on the merits to enforce the Merger Agreement. Discovery has shown each and every one of those claims to be utterly without merit.”
Twitter’s lawyers write that if Musk can evade trial, then he doesn’t have any reason to rush toward closing the deal. In Twitter’s opinion, Musk should be arranging to close the acquisition on Monday, October 10.
The Twitter legal team also said that a corporate representative for one of the lending banks testified this morning that Musk has not yet sent a borrowing notice or communicated in any way that he intends to close the transaction.
“Until Defendants commit to close as required, Twitter is entitled to its day in Court, to demonstrate its entitlement to specific performance and prove Defendants’ breaches so as to ensure complete relief in the event the closing should for any reason not occur,” the filing says.
(Disclosure: TechCrunch’s parent company Yahoo is owned by Apollo, but we do not have any further knowledge of their involvement).
DEFENDANTS AND COUNTERCLAIM… by TechCrunch
Source @TechCrunch
