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Musk Twitter turnaround highlights legal challenge he faced

Billionaire says heB次元官网网址檒l now complete the deal, but only if trial is put on hold
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Shown is the Leonard L. Williams Justice Center housing the Court of Chancery in Wilmington, Del., Tuesday, Oct. 4, 2022. Elon Musk is abandoning his legal battle to back out of buying Twitter by offering to go through with his original $44 billion bid for the social media platform. The offer comes just two weeks before TwitterB次元官网网址檚 lawsuit seeking to force Musk to go through with the deal goes to trial in Delaware Chancery Court. (AP Photo/Matt Rourke)

B次元官网网址 that Elon Musk has agreed after all may have felt like a stunning surprise from the brash billionaire who loves to shock.

It sent shares of the social media platform soaring and stoked alarm among some media watchdogs and civil rights groups worried about on Twitter under Musk.

But it wasnB次元官网网址檛 surprising to observers of the months-long legal battle as Twitter tried to compel the worldB次元官网网址檚 richest man to consummate the buyout . In the months , Musk faced a huge legal challenge.

A combination of gambles or missteps and potential advantages that didnB次元官网网址檛 pan out made his hand appear weak for the trial looming in less than two weeks in Chancery Court in Delaware. He says heB次元官网网址檒l only complete the deal if that trial is put on hold.

More immediately, Musk faced a deposition in the case by TwitterB次元官网网址檚 attorneys starting Thursday.

HereB次元官网网址檚 a look at how the legal battle unfolded:

WHAT WAS MUSKB次元官网网址橲 MAIN ARGUMENT FOR BACKING OUT OF BUYING TWITTER?

Musk grounded his argument largely on the allegation that Twitter vastly misrepresented how it measures that are useless to advertisers.

But Chancellor Kathaleen St. Jude McCormick, the courtB次元官网网址檚 head judge, apparently wasnB次元官网网址檛 buying it. As the two sides presented evidence prior to the trial, the judge appeared to focus narrowly in line with the courtB次元官网网址檚 mandate: on the merger agreement between Musk and Twitter, and whether anything had changed since it was signed in April that would justify terminating the deal.

A former Twitter head of security, fired early this year and turned whistleblower, appeared to bolster MuskB次元官网网址檚 argument. Peiter B次元官网网址淢udgeB次元官网网址 Zatko, a respected cybersecurity expert, alleging that Twitter misled regulators about its efforts to control millions of spam accounts as well as its cyber defenses.

But help to Musk from ZatkoB次元官网网址檚 disclosures was a B次元官网网址渓ongshot,B次元官网网址 said Brian Quinn, a professor at Boston College Law School, and in the end, B次元官网网址渋t didnB次元官网网址檛 really change the (legal) landscape in any significant way.B次元官网网址

DID MUSKB次元官网网址橲 APPROACH TO BUYING TWITTER HURT OR HELP HIS CASE?

B次元官网网址淗e was fairly cavalier,B次元官网网址 Quinn said. Recently released show jubilation over Musk taking a large stake in Twitter and joining its board. It wasnB次元官网网址檛 until after he signed the merger agreement in late April that he undertook whatB次元官网网址檚 called due diligence, close inspection, regarding the company and started lodging complaints about bots, Quinn noted. That may not have impressed the judge as the right approach for someone buying a major company.

WHY DID MUSK CHANGE HIS MIND NOW?

In addition to the trial looming and his deposition scheduled for Thursday, Musk faced a ticking meter of potential rising interest costs. If he lost the trial, the judge could not only force him to close the deal but also could impose interest payments that would have increased its cost. Experts say the interest likely started piling up mid-September.

But of course the deal isnB次元官网网址檛 done yet, and there are legal hoops yet to be jumped through. Given MuskB次元官网网址檚 track record and volatility, it would be a mistake to assume that itB次元官网网址檚 tied up in a bow.

B次元官网网址擬arcy Gordon, The Associated Press





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