Elon Musk is trying to get out of his $44 billion deal to buy Twitter—but Twitter doesn’t want to let him out.
On July 12, Twitter sued Musk (pdf) in Delaware Chancery Court, a state court that specializes in complex corporate law and merger deals, to enforce the terms of their original contract. Twitter doesn’t simply want to be paid in damages. The board wants Musk to buy the company.
In a scathing complaint just days after Musk informed Twitter he is terminating the merger deal, Twitter accused Musk of “a long list of material contract breaches” and asked a judge to force him to complete the deal.
The impending court battle is momentous: $44 billion and the fate of a critical social media company is on the line.
Twitter claims that Musk has no right to terminate the merger given that he signed a binding contract on April 25 to buy the company. Twitter is suing for specific performance, a clause included in the contract—that Musk signed—saying Twitter can sue not only for damages but also to enforce the merger.
Since signing the deal, Musk has claimed without evidence that Twitter is obfuscating its user data—specifically what portion of accounts are spam profiles and automated bots.
Twitter claims that not only has it given Musk all of the information he needs to complete the deal, but that any discrepancies about its user base do not amount to a material adverse effect on the company—the legal standard Musk would need to prove in court in order to be let out of the deal.
Additionally, Twitter says Musk repeatedly broke the contact by disparaging Twitter and its employees. Among the disparagement claims is the single poop emoji that Musk tweeted at Twitter CEO Parag Agrawal.
The court filing also alleges that Musk tried to undermine his own funding to give himself a way out of the deal.
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” Twitter’s lawyers wrote in the complaint.