As per the lawsuit, Musk texted Twitter CEO Parag Agrawal and CFO Ned Segal on June 28, saying, "Your lawyers are using these conversations to cause trouble. That needs to stop. Musk had sent the message to Agrawal and Segal after Twitter asked Musk how he would finance the Twitter deal.
Musk's decision to back out of the Twitter deal was not entirely shocking. Several of his tweets hinted that he was no longer interested in the deal. Musk first tweeted, saying that he had put the deal on hold. He then threatened to withdraw from the deal, claiming that Twitter failed to provide information about spam bots. On July 9, he finally terminated the deal. However, Twitter is in no mood to let Elon Musk slip off so easily. Twitter has taken a legal route to stop him from terminating the deal.
Twitter chairman Bret Taylor posted on Twitter saying that the micro-blogging site is planning to pursue legal action against Musk for pulling out of the $44 billion deal. "The Twitter Board is committed to closing the transaction at the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement." "We are confident we will prevail in the Delaware Court of Chancery," Taylor wrote.
Musk, whose tongue-in-cheek humour rarely goes unnoticed, mocked Twitter for forcing him to proceed with the deal. Sharing a meme on Twitter, Musk posted, "They said I couldn't buy Twitter." Then they wouldn't post bot info. Now they want to force me to buy Twitter in court. Now they have to disclose the bot info in court. "
According to reports, Twitter's lawsuit against Musk argues that he is contractually obligated to buy the company, despite making a public announcement that he is not taking over Twitter.
One of the prime reasons why Musk backed out of the Twitter deal was that he alleged that Twitter did not provide him with accurate information about the fake and spam accounts on the social media platform. He also alleged that Twitter did not provide information about its processes for identifying and suspending accounts.
One is that Twitter is an unusually large company to be a party in a busted merger agreement. Another is Musk's habit of thumbing his nose at governmental authority. As the nation's principal arbiter of business law, the chancery court can't afford to allow its orders to be flouted.
Before we go further into the court's options, let's examine the background of this legal maelstrom.
As we've reported, Musk signed an agreement in April to acquire Twitter for $54.20 per share, or $44 billion, and take the social media platform private.
After that, the stock market suffered a strong downturn that slashed the value of Tesla shares, some of which Musk had pledged to finance the deal. The value of Twitter also fell sharply, making his $54.20 offer look ridiculously excessive.
Musk started ginning up transparently bogus excuses to place the deal "on hold," even though the merger agreement gave him no such option.
On July 8, Musk formally pulled out of the deal, asserting (without evidence) that Twitter had misled him about the state of its business
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