September 27, 2022

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Twitter sues Elon Musk after $44 billion purchase deal falls apart

Twitter is suing Elon Musk for breach of contract, according to court documents (REUTERS/Dado Ruvic).

Twitter Inc sued Elon Musk on Tuesday for breaching a $44 billion deal to buy the social media platform. A Delaware state court asked the world’s richest man to order the merger to be completed at an agreed-upon $54.20 per Twitter share.According to court filings.

“Holding a public event to keep Twitter in line, proposing and signing a vendor-friendly affiliate agreement, Musk believes he is free to change his mind, dissolve the company, cease operations, destroy shareholder value, and exit — unlike any other party bound by Delaware contract law.”The lawsuit says.

Musk announced on Friday Twitter terminated the contract due to It breached that by failing to respond to requests for information about fake or spam accounts on the sites, which is critical to its business performance.

Brett Taylor, chairman of Twitter’s board of directors, tweeted Tuesday, according to a filing in the Delaware Court of Chancery. Elon Musk meets his contractual obligations.

The lawsuit is urging the court to order the billionaire to terminate his Twitter purchase agreement, arguing that no amount of financial compensation can repair the damage he has caused. “Musk’s conduct confirms that he intends to escape the agreement he freely signed, and harms Twitter in the process,” the suit warns. “Twitter has suffered and will continue to suffer irreparable harm as a result of the defendants’ violations.”

The Delaware trial court frequently handles commercial disputes between several companies, including Twitter, which are incorporated there.

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Twitter shares rose slightly in after-market trading after the news.

Elon Musk said he canceled the Twitter purchase because he didn't provide all the information he requested
Elon Musk said he canceled the Twitter purchase because he didn’t provide all the information he requested

The deal, signed in April, requires Musk to pay Twitter a $1 billion severance if the deal cannot be completed for financing or regulatory reasons. however, If Musk breaks the deal himself, the breakup fee is waived.

Musk threatened to terminate the deal unless the company proved that fewer than 5% of users viewing ads on the social networking service were spam and bot accounts.

Last month, Twitter gave Musk access to its “firehose,” a raw data repository of hundreds of millions of daily tweets.

Twitter’s lawyers have called Elon Musk’s bid to back out of its $44 billion purchase of the social network “void.” “The purported termination of Mr. Musk’s contract (…) is false and illegal, and constitutes a repudiation of his obligations under the contract.”, asserted the social network’s legal team in a letter shared by the Securities Market Commission (SEC).

With information from AFP, AP and Reuters

Continue reading:

Elon Musk said he canceled the Twitter purchase: he accused the company of not providing all the information he requested
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