Twitter filed suit against Elon Musk on Tuesday for pulling out of the $43.4 billion deal the tech billionaire made to purchase the company.
Musk sealed the $43.4 billion merger agreement with Twitter April 25 after the company attempted to deploy the “poison pill” to allow shareholders to purchase additional shares in order to prevent Musk from buying out a larger stake of the company.
Musk then canceled his deal with the social media platform Friday alleging that the company “appears to have made false and misleading representations” and did not comply with its “contractual obligations.”
Twitter alleged in the 62-paged lawsuit that Musk failed to follow through with his obligations after committing to buying out the company. The social media company filed the suit in the Court of Chancery of the State of Delaware.
“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,” the suit said.
Musk initially threatened to cancel the deal after Twitter reportedly refused to hand over data reports he requested regarding the number of fake and spam accounts on the platform. He repeatedly said he did not believe the company’s claims that only 5% of active users were bots.
Here we go: Twitter sues Elon Musk pic.twitter.com/Rz20U8YsdB
— kate conger (@kateconger) July 12, 2022
“Twitter has not provided information that Mr. Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Mr. Musk’s original requests,” the letter from Musk’s attorney read. (RELATED: Twitter Says It Will Sue Musk For Abandoning Deal)
The company further claimed that Musk backed out of the agreement due to the market downturn allegedly leading his stake in Tesla to decline by $100 billion since November. After the market decline, he repeatedly “breached” the merger agreement by allegedly failing to refrain from publicly insulting Twitter executives and did not successfully secure debt funding, the suit claims.
“Musk wanted an escape,” the company said. “But the merger agreement left him little room.”
In the agreement, Twitter included a provision allowing for them to sue to force the deal through, according to The New York Times.
Sean Edgett, Twitter’s general counsel, said the company is seeking a four-day trial in September, according to a memo obtained by the Times.