Elon Musk accuses Twitter of 'burying' his side of the fight over their $44B deal

·Reporter
·3 min read

Elon Musk's lawyers are accusing Twitter (TWTR) of "burying" his side of the story in their dispute over the Tesla (TSLA) CEO's decision to renege on a $44 billion deal to buy the social media site.

In dueling letters filed in Delaware Chancery Court on Wednesday, Twitter argued that court rules require Musk’s countersuit, now filed under seal, to be blocked from public view for five business days. Meanwhile, Musk accused Twitter of misapplying the rule to conceal his version of events.

“Twitter should not be permitted to continue burying the side of the story it does not want publicly disclosed,” Musk’s attorney, Edward B. Micheletti, wrote in a letter to Chancellor Kathaleen St. J. McCormick.

According to Micheletti, Twitter’s lawyers incorrectly interpreted Chancery Rule 5.1, which offers opposing parties time to make document redactions to confidential information. Micheletti said Musk is required to wait only three business days, rather than five.

The shorter timeframe, the lawyer argued, is grounded in “the public's right to know the background and allegations underlying civil actions brought before the courts of this State.”

On July 12, Twitter filed a lawsuit in Delaware Chancery Court — the country’s preeminent business dispute forum — asking for one of its chancellors to compel Musk to buy the company, as he promised in his April 25 merger agreement.

UKRAINE - 2022/04/26: In this photo illustration, Twitter account of Elon Musk is seen on a smartphone screen and Twitter logo in the background. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
UKRAINE - 2022/04/26: In this photo illustration, Twitter account of Elon Musk is seen on a smartphone screen and Twitter logo in the background. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)

Musk’s countersuit was filed under seal on July 29, and Twitter says he must keep it under seal until Aug. 5. Twitter acknowledges the public has an interest in Musk's filing.

“Few cases attract as much public interest as this one, and Twitter is mindful of this Court’s commitment to ensuring maximum public access to its proceedings,” Twitter’s lawyer Kevin Shannon wrote its communication to McCormick.

Confidential information is a hot-button issue in the mega-merger meltdown.

In a matter of weeks from signing the contract to purchase Twitter’s outstanding stock at $54.20 per share, Musk hinted of cold feet and then terminated the deal. Officially, Musk cited Twitter’s supposed refusal to hand over data it says is confidential related to the number of fake accounts, or bots, on its platform. Twitter has reported in securities filings that fake accounts are estimated to make up less than 5% of its monetizable daily active users, but Musk says he suspects the real number is much higher.

Twitter contends Musk is using the bot request as a pretext for backing out and that the agreement allows the company to both refuse Musk’s demands and force him to buy the company.

Musk's lawyers, for their part, say he can ditch the agreement entirely because Twitter's refusals qualify as a material breach — and possibly as a "material adverse effect" that would void the deal. In a July 8 termination letter, Musk's lawyers called the bot data "fundamental to Twitter’s business and financial performance" and necessary to complete the deal.

A hearing before Chancellor McCormick to consider the arguments in these letters is scheduled to take place on Friday. Last month McCormick granted Twitter’s request to set the case on an expedited schedule. A five-day trial is scheduled to begin Oct. 17.

This story was corrected to reflect the per share offer price of $54.20. A previously published version referenced a per share offer price of $44.20.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

Find live stock market quotes and the latest business and finance news

For tutorials and information on investing and trading stocks, check out Cashay