Elon Musk’s lawyers say Twitter Inc. officials are unfairly pushing for a “warp speed” trial over claims the billionaire improperly canceled his proposed $44 billion buyout of the social media company, and asked for the case to be heard next year instead.
Musk’s legal team on Friday rebuffed Twitter’s argument the case over the teetering transaction can be wrapped up in a four-day trial starting in September in Delaware Chancery Court, saying it will require “forensic review and analysis of large swaths of data” about Musk’s claims that Twitter’s customer base is riddled with spam and robot accounts.
Musk is requesting a Feb. 13, 2023, trial at the earliest, “an extremely rapid schedule for a case of this enormous magnitude,” he said in a 14-page filing, according to a representative for Musk. On July 19, the judge will hear whether or not to speed up the case.
The Twitter buyout agreement specifies that all legal disputes over the deal must be heard in Delaware, corporate home to more than half of US public companies, including Twitter and Musk’s Tesla Inc., and more than 60% of Fortune 500 companies.
Delaware Chancery Court is faster than other states. It takes several years for a case from being filed to go to trial. The judges, business law experts, are known for parsing legal thickets of complex merger-and-acquisition disputes fast and thorough. Complex cases involving business are usually argued by a judge in six to seven months after they have been filed.
Until now, Musk hadn’t responded in court to Twitter’s allegations that he’s using the bots issue as a pretext to walk away from the $54.20-per-share bid he made for the company in April. The Tesla chief executive backed out of the deal July 8, saying in a regulatory filing that Twitter had made “misleading representations” over the number of spam bots on the service.
In his response to Twitter’s fast-track request, Musk said the platform’s officials delayed in providing information about the spam and robot accounts to gain a “tactical delay” that would buttress their demand for an expedited trial.
“Twitter’s sudden request for warp speed after two months of foot-dragging and obfuscation is its latest tactic to shroud the truth about spam accounts long enough to railroad defendants into closing,” his lawyers said in the filing.
“The core dispute over false and spam accounts is fundamental to Twitter’s value,” according to the filing. “It is also extremely fact and expert intensive, requiring substantial time” for pretrial exchanges of information.
Musk even mocked Twitter employees for not being fun.
“With the sense of humor of a bot, Twitter claims Musk is damaging the company with tweets like a Chuck Norris theme and a poop emoji,” according to the filing. “Twitter ignores that Musk is its second largest shareholder with a far greater economic stake than the entire Twitter board.”
Musk’s response includes a claim that Twitter checks only 100 accounts a day when trying to calculate the number of spam bots on the service, something Musk has referred to in prior Tweets. He suggested, however, that Twitter only checks 100 accounts per day and not just one per day. It claims that it inspects around 9,000 accounts every quarter. This would mean the average of about 100 per day.
In response to Musk’s requests for specifics on spam and robot accounts, Twitter officials said they made available all the information they had by providing their whole “firehose” of data.
Musk counters that the firehose didn’t provide a wealth of bots data, but instead offered “a bespoke partial data set structured to make the necessary machine analysis impossible.”
Musk accused Twitter of violating the deal’s “ordinary course” provisions by firing some executives and setting up a hiring freeze. This requires the buyer of the buyout to carry on the normal course of business in order to wait for the deal closes.
Recently, the Chancery judge ruled that the hotel owner had breached the obligation and allowed the buyer of the string of luxurious hotels to walk away without paying more than $5 billion.
Twitter v. Musk (22-0613), Delaware Chancery Court, Wilmington).
—With assistance from Bob Van Voris.
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