{"id":22968,"date":"2022-07-12T11:55:02","date_gmt":"2022-07-12T18:55:02","guid":{"rendered":"https:\/\/occupysf.net\/?p=22968"},"modified":"2022-07-12T11:55:04","modified_gmt":"2022-07-12T18:55:04","slug":"elon-musk-may-have-to-complete-44bn-twitter-takeover-legal-experts-say","status":"publish","type":"post","link":"https:\/\/occupysf.net\/index.php\/2022\/07\/12\/elon-musk-may-have-to-complete-44bn-twitter-takeover-legal-experts-say\/","title":{"rendered":"Elon Musk may have to complete $44bn Twitter takeover, legal experts say"},"content":{"rendered":"\n<p>Tesla chief wants to terminate deal but he could be compelled to go through with it or pay a break fee<\/p>\n\n\n\n<ul><li><a href=\"https:\/\/www.theguardian.com\/technology\/2022\/jul\/10\/can-elon-musk-really-walk-away-from-44bn-twitter-takeover\">Can Elon Musk really walk away from $44bn Twitter takeover?<\/a><\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image\" id=\"45d35368-e6fc-4b04-8938-6c8f1d7a4f78\"><img decoding=\"async\" src=\"https:\/\/i.guim.co.uk\/img\/media\/d90cd88165b86c44d7cac85971fc19a9dfb27a32\/0_144_3500_2100\/master\/3500.jpg?width=620&amp;quality=85&amp;fit=max&amp;s=ff2e261a049ebe8faf0a46b6423c9366\" alt=\"Elon Musk image on smartphone and printed Twitter logos\"\/><figcaption>Elon Musk has cited concerns over the number of spam accounts on Twitter as reason for pulling out of takeover deal.&nbsp;Photograph: Dado Ruvi\u0107\/Reuters<\/figcaption><\/figure>\n\n\n\n<p><a href=\"https:\/\/www.theguardian.com\/profile\/danmilmo\">Dan Milmo<\/a>\u00a0Global technology editor Sun 10 Jul 2022 15.21 BST (TheGuardian.com)<\/p>\n\n\n\n<p>Elon Musk could be forced by a US court to complete his $44bn takeover of Twitter, according to legal experts, despite&nbsp;<a href=\"https:\/\/www.theguardian.com\/technology\/2022\/jul\/08\/elon-musk-buy-twitter-withdraw\">pulling the plug<\/a>&nbsp;on the transaction.<\/p>\n\n\n\n<p>The Tesla chief executive told Twitter on Friday that he is terminating the deal, citing concerns over the number of&nbsp;<a href=\"https:\/\/www.theguardian.com\/technology\/2022\/jul\/07\/twitter-says-it-suspends-1m-spam-users-a-day-as-elon-musk-dispute-deepens\">spam accounts<\/a>&nbsp;on the social media platform.<\/p>\n\n\n\n<p>Twitter\u2019s chairman, Bret Taylor, responded with a tweet stating that the company intended to \u201cpursue legal action to enforce the merger agreement\u201d.<\/p>\n\n\n\n<p><blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.<\/p>&mdash; Bret Taylor (@btaylor) <a href=\"https:\/\/twitter.com\/btaylor\/status\/1545526087089696768?ref_src=twsrc%5Etfw\">July 8, 2022<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n\n\n\n<p>On Sunday night, Bloomberg reported that Twitter had assembled a legal team to sue Musk.<\/p>\n\n\n\n<p>One legal expert said he expected Twitter to file a lawsuit in Delaware, the US state that has jurisdiction over the deal, as soon as Monday.<\/p>\n\n\n\n<p>\u201cThey will likely be asking for a declaratory judgment that they are not in violation of the contract. Also, they will ask for an order from the court that Musk specifically perform his obligations under the agreement,\u201d said Brian Quinn, an associate professor at Boston College law school.<\/p>\n\n\n\n<p>Under the&nbsp;<a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/1418091\/000119312522120474\/d310843ddefa14a.htm\">terms of the agreement<\/a>&nbsp;the company can ask a judge for \u201cspecific performance\u201d, which would compel Musk to buy the company for the $54.20 a share&nbsp;<a href=\"https:\/\/www.theguardian.com\/technology\/2022\/apr\/25\/twitter-elon-musk-buy-takeover-deal-tesla\">he agreed to in April<\/a>. Alternatively, the company can also seek a $1bn break fee from Musk for walking away from the deal in contravention of the agreement.<\/p>\n\n\n\n<p>John Coffee, a professor of law at Columbia University, said: \u201cThey will sue in Delaware\u2019s chancery court for specific performance. That is, asking for an order compelling Musk and his affiliates to close the deal at the original price.\u201d<\/p>\n\n\n\n<p>Quinn said Musk\u2019s arguments would probably fail in court. In Friday\u2019s letter, Musk put forward three broad arguments: that Twitter had breached the agreement by failing to provide enough information on spam accounts; that Twitter has misrepresented the number of spam accounts in its disclosures to the US financial watchdog; and that the company breached the agreement by failing to consult with Musk when firing senior employees recently.<\/p>\n\n\n\n<p>Quinn said Musk\u2019s information requests on spam accounts were not \u201creasonable\u201d and would not be accepted by the court. \u201cHe can\u2019t use unreasonable information requests to create a pretext to claim a violation,\u201d he said.<\/p>\n\n\n\n<p>Columbia University\u2019s Coffee said: \u201cMusk is on very weak legal grounds. Twitter appears to have given him access to just about everything to satisfy his desire to know the percentage of bots among its users.\u201d<\/p>\n\n\n\n<p>Carl Tobias, Williams chair in law at the University of Richmond, said: \u201cMusk\u2019s filing does not appear to give him strong legal grounds to walk away from the deal. His counsel has only made allegations and arguments for Musk\u2019s position and judges would have to decide whether the evidence that Musk would present is persuasive enough to support ending the deal.\u201d<\/p>\n\n\n\n<p>Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk<\/p>\n\n\n\n<p>However, Tobias added that both sides could agree to settle rather than end up in a situation where Musk is required to buy a company he no longer wants. Analysts have warned that a protracted legal battle could further damage Twitter\u2019s share price and employee morale. A settlement with Musk would draw a line under the affair.<\/p>\n\n\n\n<p>\u201cMost similar disputes usually conclude with settlements that permit plaintiffs and defendants to save face,\u201d said Tobias.<\/p>\n\n\n\n<p>Analysts have also speculated that Musk could use the legal battle to seek a lower price for Twitter, although investors are also expected to consider legal action if the deal fails to go through at $54.20 a share and sue for the difference between the sale price and the current stock price. Twitter is currently trading at $36.81 a share.<\/p>\n\n\n\n<p>\u201cI doubt that the court will get to rule before there is a settlement, and the day-to-day price of Twitter will give you some idea of what Musk\u2019s side will hope to pay,\u201d said Coffee.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tesla chief wants to terminate deal but he could be compelled to go through with it or pay a break fee Can Elon Musk really walk away from $44bn Twitter takeover? Dan Milmo\u00a0Global technology editor Sun 10 Jul 2022 15.21 BST (TheGuardian.com) Elon Musk could be forced by a US&#8230; <a class=\"continue-reading-link\" href=\"https:\/\/occupysf.net\/index.php\/2022\/07\/12\/elon-musk-may-have-to-complete-44bn-twitter-takeover-legal-experts-say\/\"> Continue reading <span class=\"meta-nav\">&rarr; <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/22968"}],"collection":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/comments?post=22968"}],"version-history":[{"count":1,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/22968\/revisions"}],"predecessor-version":[{"id":22969,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/22968\/revisions\/22969"}],"wp:attachment":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/media?parent=22968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/categories?post=22968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/tags?post=22968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}