UDPATED: A Delaware judge granted mega-billionaire Elon Musk‘s motion to halt Twitter‘s upcoming trial — seeking to compel him to pay what he promised for the company — until Oct. 28 in order to allow the parties to close on the $44 billion deal.
Musk, after trying for three months to exit his deal to buy Twitter, in the last few days has grown frustrated that Twitter wasn’t calling off its lawsuit. Lawyers representing Musk, in a filing Thursday with the Delaware Court of Chancery, requested that the trial, slated to commence Oct. 17, be suspended while he works out a deal to finalize the required debt financing to swing the acquisition. Musk expects that to happen by Oct. 28, per the court filing.
Chancellor Kathaleen McCormick of the Delaware Chancery Court granted the motion. “This action is stayed until 5 p.m. on October 28, 2022, to permit the parties to close on the transaction,” she wrote in the decision Thursday. She added that if the deal does not close by 5 p.m. on Oct. 28, “the parties are instructed to contact me by email that evening to obtain November 2022 trial dates.”
Twitter had opposed halting the trial, writing in a court filing that doing so was “an invitation to further mischief and delay.”
Musk on Monday informed Twitter that he would proceed with his original $54.20/share offer for the company, valued at $44 billion, after he previously claimed on three occasions that he was justified in walking away from the agreement because (he had alleged) Twitter violated the merger terms. Attorneys for Twitter have argued that Musk simply didn’t want to pay what he originally promised because his net worth declined with a drop in Tesla’s stock price.
Musk’s legal team wrote in Thursday’s court filing, “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.”
Twitter argued in its court filing Thursday that the merger “can and should close next week.”
“Until [Musk] commit[s] to close as required, Twitter is entitled to its day in court, to demonstrate its entitlement to specific performances and prove [Musk’s] breaches so as to ensure complete relief in the event the closing should for any reason not occur,” the company’s lawyers said.
Twitter, in responding to Musk’s Oct. 3 letter, had said in a statement, “We received the letter from the Musk parties which they have filed with the SEC. The intention of the company is to close the transaction at $54.20 per share.”
According to the most recent SEC filing from Musk’s camp pertaining to his on-again-off-again deal to buy Twitter, in May, his $44 billion offer comprised $27.25 billion in equity financing, $6.25 billion in margin loans and $10.5 billion in debt financing.
