Elon Musk’s latest promise to buy Twitter cannot be trusted, the company told a Delaware Chancery Court judge yesterday.
“Now, on the eve of trial, the defendants say they intend to close after all. ‘Trust us,’ they say, ‘we mean it this time,’ and so they ask to be excused. of a judgment on the merits”, Twitter wrote in a filing that opposes Musk’s motion suspend the trial. “To justify this relief, they propose an order granting them an indefinite period of time to close based on a conditional withdrawal of their unlawful notices of termination with an explicit reservation of all claims and defenses in the event of non-closure. . .’ The defendants’ proposal is an invitation to further wrongdoing and delay.”
While Musk told the court that the debt financing needed to complete the purchase was on track, Twitter’s filing indicated there was a problem:
Just this morning, a representative from one of the lending banks testified that Mr. Musk had not yet sent them a borrowing notice and had not otherwise communicated to them that he intended to conclude the transaction, let alone within a particular timeframe. The bank further testified that the primary task needed to complete the deal – commemorating the debt financing – could have happened in July, but did not because Mr. Musk claimed to be terminating the deal.
Judge Kathleen McCormick granted Musk’s motion for a stay yesterday, preventing the trial from starting on October 17 as scheduled. But she appears to have heeded Twitter’s concerns that McCormick’s granting of the suspension does not give Musk “indefinite time to shut down.” If Musk doesn’t complete the Twitter purchase by October 28, a retrial is expected in November.
“This action is suspended until 5:00 p.m. on October 28, 2022, to allow the parties to complete the transaction. If the transaction does not close by 5:00 p.m. on October 28, 2022, the parties are requested to contact me by e-mail this evening there. to get trial dates for November 2022”, McCormick wrote.
Musk is the obstacle, says Twitter
Musk stay motion lambasted Twitter for wanting to pursue the litigation, saying “Twitter won’t take a yes for an answer” and “recklessly jeopardizes the deal and plays with the interests of their shareholders.”
Twitter’s response stated that Musk should have finalized the merger a long time ago:
The obstacle to ending this litigation is not, as the defendants say, that Twitter is unwilling to accept yes for an answer. The obstacle is that the defendants always refuse to accept their contractual obligations. For months, the defendants pursued increasingly implausible claims and repeatedly sought to delay the trial on the merits to enforce the merger agreement. The discovery showed each of these claims to be completely baseless. Defendants have also been shown to have repeatedly failed in their obligation to use all reasonable efforts to bring about closure. The merger is long overdue, as defendants’ recent concessions confirm.
Musk’s motion stated that “the debt financing parties are working cooperatively to fund closing, and closing is expected on or about October 28.” But Twitter’s response says the defendants “refuse to commit to a closing date. They’re asking for an open exit, at the expense of Twitter shareholders (who are owed $44 billion plus interest), while remaining free to change their minds again. .”
“Twitter is entitled to his day in court”
Twitter wrote that Musk’s proposed order seeks a reprieve”[w]without any acknowledgment of liability and without waiver or prejudice to [their] claims and defenses.” Twitter said the provision would allow Musk to “invent new grounds” to avoid finalizing the merger.
Twitter also said that Musk “provided no justification” for not having already completed the merger and breached the obligation to make “reasonable best efforts” to close the merger and to “do … whatever is necessary , appropriate or desirable” to complete the merger. financing at or before closing.” The merger agreement obligates Musk to close the deal within two business days of meeting all conditions, a date that “came and ended on September 15,” a said Twitter. (shareholders of Twitter approved merger on September 13.)
Twitter’s filing ended with a plea to keep the Oct. 17 trial date, but also said the merger could be completed by next week. “Until Defendants agree to shut down as required, Twitter is entitled to its day in court, to demonstrate its right to specific performance and prove Defendants’ violations to secure full relief in the case. where the shutdown would not occur for some reason,” the filing said. “The defendants can and must conclude next week. Until they do, this action is not moot and must go to trial.”