Angry Twitter Sues Musk in 'Counterattack'... "Finalize the Acquisition Deal" (Summary)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Social networking service (SNS) Twitter filed a lawsuit on the 12th (local time) against Elon Musk, CEO of Tesla, who canceled the acquisition contract. This marks the beginning of an unprecedented legal dispute between a global SNS and the world's richest person. Twitter claimed that Musk CEO must complete the acquisition at $54.20 per share (about 71,000 won) as previously agreed and accused him of "material breach of contract."

According to the Wall Street Journal (WSJ) and others, Twitter submitted a complaint to the Delaware Court of Chancery on the same day. This came four days after Musk CEO announced he would terminate the $44 billion Twitter acquisition deal, citing Twitter's failure to comply with contractual obligations related to providing information on fake accounts and not seeking consent for changes in business operations such as employee layoffs.

According to the complaint submitted by Twitter, Twitter argued that Musk CEO's declaration to terminate the deal was "invalid and unjust," and that Twitter has never breached its obligations. Twitter's legal team demanded Musk CEO fulfill his obligations, stating that contracts with financial institutions are affected and the deal has not yet been terminated.

In particular, regarding fake accounts, i.e., spam bots, which Musk CEO pointed out, Twitter criticized Musk's demands as absurd and abnormal, arguing that spam bots have always existed and thus this issue cannot be considered valid. Furthermore, Twitter explained that although they tried to respond to this matter, Musk CEO either did not attend meetings or ignored briefings.

Twitter stated, "Musk, who made Twitter a public spectacle and proposed and signed a seller-friendly merger agreement, clearly believes that unlike all other parties subject to Delaware contract law, he can change his mind, ruin the company, interfere with operations, damage shareholder value, and walk away." They added that as market conditions changed and Musk CEO's personal wealth decreased by more than $100 billion from its peak in November last year, he changed his mind, "preferring to pass the costs of the market downturn onto Twitter's shareholders rather than bear them himself."

Twitter also claimed that Musk CEO could be liable financially. Twitter criticized, "Since signing the merger agreement, Musk has repeatedly disparaged Twitter and this has posed risks to Twitter's business and caused the stock price to fall." Twitter is preparing for a shareholder vote on the deal in mid-next month and emphasized that Musk CEO must close the deal within two days thereafter, warning that failure to do so could harm Twitter's business.

Twitter requested the court to expedite the lawsuit, stating, "We must protect shareholders from operational damages and ongoing market risks caused by Musk CEO's attempt to avoid the confidential merger agreement." WSJ explained that if the case is classified as expedited in the Court of Chancery, matters that usually take years can be resolved within months. Bloomberg News reported, citing a source, that "Twitter hopes the trial will begin as early as mid-September."

This content was produced with the assistance of AI translation services.