Bulletins

Twitter sues Elon Musk for trying to walk away from his deal

Twitter is aiming to hold a four-day trial in September. It must complete the deal to sell itself to Musk by Oct. 24.

Twitter

Twitter is suing Elon Musk to force him to buy the company.

Photo: Joshua Hoehne via Unsplash

Twitter sued Elon Musk Tuesday to force him to go through with the $44 billion buyout he proposed, then backed away from.


Musk filed to back out of the acquisition on Friday, in a move he'd been signaling for some time. He claimed he'd put the deal "on hold" in May as his team investigated the amount of bots on the service.

Twitter board chairman Bret Taylor tweeted Friday that the company planned to pursue legal action to close the deal.

"Now, less than three months later, Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests," Twitter said in its lawsuit.

Musk's lawyers claimed Twitter had made "false and misleading representations" around the issue of fake or spam accounts, concluding that more than 5% of Twitter users were bots. They also complained that Twitter did not provide financial planning documents, including a 2022 budget, and that its "firehose" of data had limitations.

But Twitter negotiated strong protections against Musk walking away, including a $1 billion termination fee and a clause that allows Twitter to seek "specific performance," or relief that involves a court compelling Musk to carry out the deal.

Now, a court must decide if Twitter resisted Musk's requests to hand over information about spam and bots, the only real way Musk can wiggle out of the deal.

“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 lawsuit said.

Twitter is aiming to hold a four-day trial in September, and must complete it by Oct. 24.

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