Elon Musk countersues Twitter in bid to walk away from $44bn takeover deal

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Elon Musk pictured at a technology summit in Dublin  (PA Archive)
Elon Musk pictured at a technology summit in Dublin (PA Archive)

Elon Musk has countersued Twitter on Friday in an escalation of his legal fight against the company in a bid to walk away from the $44bn (£36.1bn) deal.

The 164-page counterclaim, which was filed confidentially, came hours after Chancellor Kathaleen McCormick of the Delaware Court of Chancery ordered a five-day trial beginning October 17 to determine if Musk can walk away from the deal.

Twitter has not immediately commented on the suit.

Musk was also sued Friday by a Twitter shareholder who asked the court to order the billionaire to close the deal, on the grounds that he breached his fiduciary duty to Twitter shareholders and to award damages for losses caused.

That lawsuit claims the entrepreneur owes Twitter’s shareholders a fiduciary duty because he has a 9.6 per cent stake in the company, and the takeover agreement gave him a veto over many company decisions.

The lawsuit was filed by Luigi Crispo, who owns 5,500 Twitter shares, in the Court of Chancery.

 (PA Wire)
(PA Wire)

Musk, the world’s richest person, said earlier this month he was abandoning the Twitter takeover bid, blaming the social media giant for breaking the agreement by misrepresenting how many “bots” there were.

Twitter countersued the Tesla head days later, calling the fake account claims a distraction and saying Musk was obliged to close the deal at $54.20 (£44.50) a share.

Musk had also field a motion to try to stop the social media company’s trial, with his lawyers Twitter’s lawsuit was the latest tactic “to shroud the truth about spam accounts long enough to railroad defendants into closing”.

Judge McCormick fast-tracked the case to trial last week, saying she wanted to limit the potential harm to Twitter caused by the uncertainty of the deal.

Twitter has blamed the court fight for hitting revenues and causing chaos within the company.

Both sides remain at odds over limits of discovery, or access to documents and other evidence, during the trial.

Musk accused Twitter this week of dragging its feet in response to his discovery requests, and Twitter accused him of seeking huge amounts of data that are irrelevant to the case.

The chief judge in her order on Friday appeared to predict further discovery disputes to come.

"This order does not resolve any specific discovery disputes, including the propriety of any requests for large data sets," said Judge McCormick.

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