Twitter officially filed a lawsuit against billionaire Elon Musk on Tuesday in the Delaware Court of Chancery after Musk said he would terminate his $44 billion deal to buy the social media giant.
Musk, who has become a deeply polarizing figure as of late, said last week that he would no longer seek to buy Twitter, sparking speculation of a major legal drama.
Musk’s lawyer, Mike Ringler, sent a letter to Twitter saying “Twitter has not complied with its contractual obligations.”
“Twitter has failed or refused to provide this information,” Ringler claimed, referencing Musk’s demand that Twitter discloses to him how many of its accounts are not actual people.
“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” the letter added.
Musk “signed a legally binding agreement in April to buy the company for $54.20 a share, waiving due diligence to get the deal done quickly,” reported the New York Times.
Musk over to pay far above market value for a social media company that is not known for making a substantial profit.
“The terms included a $1 billion breakup fee if the agreement fell apart and a clause that gives Twitter the right to sue Mr. Musk and force him to complete or pay for the deal, so long as the debt financing he has corralled remains intact,” the report added.
Twitter released a statement on Tuesday saying Musk now “refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” Twitter added in the legal complaint.
“This repudiation follows a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business.”
