Twitter sues Elon Musk, says he can’t “trash the company… and walk away”

The social network filed a lawsuit against Musk, demanding that he complete his purchase of the company.

The lawsuit said that Musk refused to honor his obligations due to the fact that the deal he signed no longer served his interests. Unlike every other party subject to Delaware contract law, Musk believes that he is free to change his mind, trash the company, destroy stockholder, and so on.

The suit accused Musk of a long list of material contractual breeches that have cast a pall over the company and asked the court to "compel consummation of the merger upon satisfaction of the few outstanding conditions." According to the lawsuit, Musk personally was bound by the provision in the purchase agreement that allowed for the right to demand specific performance of the agreement.

The lawsuit was filed in the Delaware court. We will be adding a breaking news article as we read the complaint, and you can read the whole thing here.

Musk’s unsolicited, “seller-friendly” offer

According to the lawsuit, Musk made a "take-it-or-leave-it" offer of $54.20 per share, representing a 38 percent premium over the unaffected share price.

The other terms Musk offered were "seller friendly." There is no financing contingency. Debt and equity commitments are behind the deal. Musk has personally committed over $30 billion.

After the agreement was signed, the market fell and the value of Musk's stake in the company dropped by more than $100 billion. Musk would like to leave." Musk wants to shift the cost of the market downturn to the stockholders of the company. This is in line with the tactics Musk has used against the company and its stockholders since earlier this year, when he started amassing an undisclosed stake in the company and continued to grow his position without required notification.

The complaint said that since agreeing to buy the company, Musk has "repeatedly disparaged" it, creating business risk and downward pressure on its share price.

“Model of hypocrisy”

Musk's exit strategy is a model of hypocrisy, as pointed out in the lawsuit. In order to take the company private, Musk said that it would be impractical to purge the internet of junk mail. In the press release announcing the deal, Musk said his goal was to defeat the spam bots.

Musk sweetened his offer to the board by withdrawing his prior diligence condition, the lawsuit said. After the market dropped, Musk started questioning the estimates of the amount of junk mail that was sent.

The complaint said that Musk shifted his narrative, suddenly demanding "verification" that the problem was not a real one on the platform.

Musk wanted an escape from the dispute over the number of fake and bogus users on the micro-messaging service. The merger agreement left him little room. Without a financing contingency or diligence condition, the agreement gave Musk no out unless there was a Material Adverse Effect or a covenant violation by the company. Musk had to come up with one of those.