Musk has until October 28 to complete the transaction, according to Delaware Chancery Court Chancellor Kathaleen St. Jude McCormick, who made the announcement on Thursday. If he doesn’t, a trial scheduled for October 17 will take place in November, she said.
Twitter has asked the Delaware court to allow a trial against Elon Musk to go forward, claiming that the billionaire has refused to fulfill the “contractual obligations” of his April deal to pay $44 billion for the social media business.
Soon after Musk’s legal team requested that the trial be postponed while he works on a new offer to purchase the firm, Twitter lawyers wrote to the chief judge of the Delaware Chancery Court on Thursday.
Twitter refuted Musk’s assertion that the San Francisco-based business is rejecting the latest offer, which Musk informed the business about earlier this week after attempting to end the agreement over the summer.
The business has been requesting a court order to force the merger to be completed, and it has stated that it plans to do so at the agreed-upon price. However, it referred to Musk’s decision to postpone the trial as “an invitation to further mischief and delay.”
Prior to the trial’s scheduled start on October 17, Musk should seek to finalise the transaction by Monday, according to Twitter.
“But they aren’t. Instead they refuse to commit to any closing date,” Kevin Shannon, an attorney for Twitter, wrote in the letter. “They ask for an open-ended out, at the expense of Twitter’s stockholders (who are owed $44 billion plus interest), all the while remaining free to change their minds again or to invent new grounds to avoid the contract,” the lawsuit reads.
Brooklyn Law School professor Andrew Jennings said Twitter wants to be certain that the deal will get done and not allow “wiggle room for Musk to walk away again.”
Twitter doesn’t seem to have the assurance it wants.
“Otherwise, we would’ve seen a joint filing to the court on how the two sides want to proceed,” Jennings said. “As of right now, the trial train keeps rolling until both parties or the court apply the brakes.”
Early on Thursday, Musk’s legal team suggested that the trial be postponed to give Musk more time to find the funding.
“Twitter will not take yes for an answer,” said the court filing signed by Musk attorney Edward Micheletti. “Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders’ interests.”
Eric Talley, a Columbia University law professor, tweeted Thursday that Twitter “is absolutely right not to take ‘yes’ for an answer, and everyone knows why. (They tried that in April and it didn’t go so well).” He added that Twitter would, however, take a “certified bank transfer” from Musk.
Musk attorneys argue that Twitter is disagreeing with the trial delay “based on the theoretical possibility” of Musk not coming up with the financing, which they call “baseless speculation.”
They said Musk’s financial backers “have indicated that they are prepared to honor their commitments” and are working to close the deal by Oct. 28, roughly a week after the trial was set to conclude.
Shares of Twitter decreased $1.91, or 3.7%, to end the day on Thursday at $49.39. It was the stock’s second day of losses after rising more than 22% on Tuesday as a result of Musk’s fresh bid to purchase the business.