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Elon Musk Twitter stockholder lawsuit overview:
- Who: Elon Musk asked a judge to dismiss a lawsuit filed by Twitter stockholders that seeks to force him to close on a $44 billion offer to buy the company.
- Why: The tech mogul is trying to back out of the acquisition, claiming Twitter misrepresented itself to him.
- Where: The case is being heard in the Court of Chancery of the State of Delaware
Tech mogul Elon Musk urged a Delaware judge to dismiss a class action lawsuit filed against him by Twitter stockholders who seek to force him to close on a $44 billion offer to buy the social media company.
In a recent hearing, an attorney for Elon Musk told the chancellor of the Court of Chancery of the State of Delaware that the Twitter stockholder lawsuit was “completely unprecedented” in what it asked for, Law360 reports.
Musk’s attorney, Edward B. Micheletti of Skadden Arps Slate Meagher & Flom LLP, told Chancellor Kathaleen St. J. McCormick that the class action lawsuit could “open the floodgates” to similar third-party pre-closing deal challenges.
The news comes after Twitter stockholder Luigi Crispo filed a class action complaint against Musk July 29, asking the court to force the tech entrepreneur to complete the $54.20-per-share deal he signed April 25.
After signing the deal, Musk later backed out, seeking to terminate it on July 8 by alleging that Twitter failed to disclose pertinent details about its operations to him.
Among the allegations is that Twitter gamed its numbers by not properly counting how many users on the platforms are “bots.”
Musk seeks termination of deal, citing statements of fired exec
Musk expanded on his attempted termination of the deal twice since then.
Most recently, he pointed to the public statements of a fired Twitter security expert that Musk says support claims of undisclosed failures to address major security problems.
The former Twitter exec claims the social networking company has reckless and negligent cybersecurity policies, endangering its users personal information.
However, Twitter also sued to enforce the agreement with a five-day trial slated to begin Oct. 17.
Meanwhile, lawyers for the stockholders argue that their case should not be dismissed because their arguments meet a court test for “reasonable conceivability” and are worthy of a pretrial discovery investigation, according to the Twitter stockholder lawsuit.
In related Twitter news, earlier this month, Twitter was accused of making materially false and misleading statements about the social networking company’s business, operations and prospects.
What do you think of the allegations in the Twitter stockholder lawsuit? Let us know your thoughts in the comments!
Crispo is represented by Michael Hanrahan, Samuel L. Closic, John G. Day and Robert B. Lackey of Prickett Jones & Elliott PA and Max Huffman, Joseph A. Pettigrew, Scott R. Jacobsen and Jing-Li Yu of Scott + Scott Attorneys at Law LLP.
The Twitter Elon Musk class action lawsuit is Crispo v. Musk et al, Case No. 2022-0666, in the Court of Chancery of the State of Delaware.
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