Elon Musk countersued Twitter on Friday, escalating his legal fight against the social media company over his bid to walk away from the $44 billion purchase, although the lawsuit was filed confidentially.
While the 164-page document was not publicly available,
under court rules a redacted version could soon be made public.
Musk's lawsuit was filed hours after Chancellor Kathaleen
McCormick of the Delaware Court of Chancery ordered a five-day trial beginning
Oct. 17 to determine if Musk can walk away from the deal.
Twitter did not immediately respond to a request for
comment.
Also on Friday, Musk was sued by a Twitter shareholder who
asked the court to order the billionaire to close the deal, find that he breached
his fiduciary duty to Twitter shareholders and award damages for losses he
caused.
Musk owes a fiduciary duty to Twitter's shareholders because
of his 9.6 percent stake in the company and because the takeover agreement
gives him a veto of many of the company's decisions, according to the lawsuit,
which seeks class status. The lawsuit was filed by Luigi Crispo, who owns 5,500
Twitter shares, in the Court of Chancery.
Musk, the world's richest person and chief executive of
Tesla, said on July 8 that he was abandoning the takeover and blamed Twitter
for breaching the agreement by misrepresenting the number of fake accounts on
its platform.
Twitter sued days later, calling the fake account claims a
distraction and saying Musk was bound by the merger contract to close the deal
at $54.20 per share. The company's shares ended on Friday at $41.61, the
highest close since Musk abandoned the deal.
McCormick fast-tracked the case to trial last week, saying
she wanted to limit the potential harm to Twitter caused by the uncertainty of
the deal.
Twitter has blamed the court fight for slumping revenue and
causing chaos within the company.
The two sides had basically agreed to an Oct. 17 trial, but
were at odds over the limits of discovery, or access to internal documents and
other evidence.
Musk accused Twitter this week of dragging its feet in
response to his discovery requests, and Twitter accused him of seeking huge
amounts of data that are irrelevant to the main issue in the case: whether Musk
had violated the deal contract.
The chief judge in her order on Friday appeared to
anticipate discovery disputes to come.
"This order does not resolve any specific discovery
disputes, including the propriety of any requests for large data sets,"
said McCormick.
Musk also faces a week-long trial in Wilmington, Delaware,
beginning Oct. 24. A Tesla shareholder is seeking to void as corporate waste
and unjust enrichment the CEO's record-breaking $56 billion pay package from
the electric vehicle maker. © Reuters
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