Musk asked the judge to stay the case because "Twitter will not take yes for an answer."
The company is asking for assurances that Musk won't break the merger contract again before agreeing to stop litigation. In a court filing today, Musk's lawyers accused the social network of not acting fast enough.
Twitter will not take yes for an answer. Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders' interests. Proceeding toward trial is not only an enormous waste of party and judicial resources, it will undermine the ability of the parties to close the transaction.
The October 17 trial has been removed from the Delaware Court of Chancery's calendar due to changed circumstances. The merger is on track to close by October 28, according to Musk.
A stay wouldn't end the court case, but it wouldn't stop the trial from going ahead.
The issue of debt financing is a sticking point. The original deal is pending receipt of debt financing, according to Musk's letter.
Musk has committed tens of billions of dollars. Financing for the rest of the $44 billion purchase price will not be a problem, according to his filing.
Quite to the contrary, counsel for the debt financing parties has advised that each of their clients is prepared to honor its obligations under the Bank Debt Commitment Letter on the terms and subject to satisfaction of the conditions set forth therein. We have so advised Twitter, again to no avail. Not only has Twitter's baseless speculation been refuted by the banks themselves, any theoretical claims Twitter could concoct based on a potential financing failure that has not happened are unripe and unpled, making them well outside the scope of the trial set to begin in eleven days.
Continuing litigation would send a signal to the market that despite Defendants' commitment to perform their obligations under the Merger Agreement and Equity Commitment Letter,Twitter is demanding that the court impede the deal moving forward. The parties will be distracted by completing discovery and an unnecessary trial instead of focusing on securing the debt financing needed to complete the transaction. A trial would cause an unnecessary cloud of uncertainty over the company.
"Shareholders would receive their payments far faster than would be possible if the company were to proceed to trial and win again on appeal," Musk's filing said.
AdvertisementMusk tried to get out of the deal by accusing the company of lying about the number of accounts on the platform. The lawsuit was filed to make Musk complete the purchase.
The company faces problems due to Musk's public criticism and his attempts to break the merger agreement, according to the lawsuit.
The derogation of the deal's consummation creates uncertainty and delay that harms the company and its stockholders. They expose the company to negative effects on its business operations, employees, and stock price.
The discovery process made it unlikely that Musk could win at trial.
All Rights Reserved © 2024
