WHAT YOU NEED TO KNOW:
- Elon Musk on Friday terminated his agreement to buy Twitter.
- Musk reached a deal with Twitter in April to buy the company for $44 billion.
- The Tesla CEO likely faces a long battle ahead with Twitter in court, according to legal experts.
Twitter is organizing a team of high-profile legal experts to sue Elon Musk for breaking off his $44 billion deal to buy the platform, according to Bloomberg News on Sunday.
The social media platform aims to file suit against the billionaire early this week in Delaware where the company’s corporate home lies, the news outlet reported.
Twitter has hired the service of the law firm Wachtell, Lipton, Rosen & Katz, known for its work in mergers.
If the social media company is successful, it could force Musk to pay a $1 billion breakup fee, according to Bloomberg.
The Telsa CEO backed out of the agreement after Twitter failed to provide information about fake accounts on the platform, court documents filed by Musk’s team claimed.
His attorneys alleged in a Friday court filing that “Twitter is in material breach of multiple provisions” of the buyout deal, and that the platform “appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement.”
Musk has retained Quinn Emanuel Urquhart & Sullivan, a high-profile law firm that he’s worked with before, according to Bloomberg.
The case is expected to be tried in a chancery court. The judge, who should be an expert in business law, will hear arguments without a jury.
In April, Musk got a $44 billion deal to take over Twitter, but he put the buyout on hold until the social media company presented proof that spam and bot accounts were fewer than 5% of users who see advertising on the site.
Insiders speculated that the billionaire backed out on the deal because he is now paying a massive premium for Twitter as a result of the tech stock correction.
Source: New York Post