Twitter set to sue Elon Musk, hires mergers law firm

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Twitter has hired an elite law firm to handle its upcoming lawsuit against Elon Musk, which could be filed any day.

After Musk pulled out of his deal to buy Twitter for $44 billion on Friday, Twitter Chairman Bret Taylor said the company will sue Musk to enforce the merger agreement and force him to complete “the transaction at the agreed price and terms.” Twitter then hired “merger law heavyweight” Wachtell, Lipton, Rosen & Katz to work on a lawsuit it plans to file early this week in the Delaware Court of Chancery, Bloomberg reported.

“Wachtell Lipton has perhaps the leading litigation practice in Delaware, where the majority of U.S. public companies are incorporated,” the Financial Times wrote. “He defends companies in lawsuits for breach of fiduciary duty and breach of merger agreements in the state.”

Wachtell is giving Twitter “access to attorneys, including Bill Savitt and Leo Strine, who served as chancellors of the Delaware Chancery Court,” Bloomberg wrote. Wachtell has previously represented Musk and Tesla in other cases.

To defend against Twitter’s lawsuit, Musk hired Quinn Emanuel Urquhart & Sullivan. “The company successfully defended a defamation claim in 2019 and is representing him in an ongoing shareholder lawsuit over his failed attempt to take Tesla private in 2018,” Bloomberg wrote.

Merger deal could force Musk into a deal

Shares of Twitter have continued their decline, falling more than 8% in today’s trading so far. The stock price was below $34 at the time of this writing, while Musk agreed to buy the company for $54.20 per share.

The Twitter/Musk deal includes a $1 billion break fee that applies in certain circumstances, but Twitter can try more than that. As we wrote, the merger agreement states that if Twitter performs its obligations under the agreement, it “will be entitled to specific performance or other equitable remedy” to “bring the equity investor [Musk] to fund the equity financing, or to enforce the equity investor’s obligation to directly fund the equity financing and effect the closing. »

Musk claimed Twitter violated the merger agreement in his Friday letter notifying the company that he was terminating the deal. Musk’s claims relate to his attempts to get more information about spam estimates from Twitter, with the letter saying:

While Section 6.4 of the Merger Agreement requires Twitter to provide Mr. Musk and his advisers with all data and information that Mr. Musk requests “for any reasonable business purpose related to the completion of the transaction”, Twitter does not failed to meet its contractual obligations. For nearly two months, Mr. Musk researched the data and information needed to “make an independent assessment of the prevalence of fake accounts or spam on Twitter’s platform”… This information is fundamental to business and financial performance. of Twitter and are necessary to complete the transactions contemplated by the Merger Agreement, as necessary to ensure Twitter’s satisfaction of closing conditions, to facilitate Mr. Musk’s financing and financial planning for the transaction, and to engage in transition planning for the business. Twitter failed or refused to provide this information. Sometimes Twitter ignored Mr. Musk’s requests, sometimes it rejected them for reasons that seem unwarranted, and sometimes it pretended to comply while giving Mr. Musk incomplete or unusable information.

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