The judge overseeing the takeover dispute between Elon Musk and Twitter on Thursday decided to stay the trial until October 24. 28 at the request of the Tesla CEO, which means that the trial, which was supposed to start on October 28, will not take place on October 28, 17 as planned.
Twitter denied Musk’s request for a stay, citing concerns that he might not be able to keep his word to close the deal quickly.
“If the transaction is not completed by 5 p.m. on October 28, 2022, the parties are directed to email me that evening for November 2022 hearing dates,” said the judge, Registrar of the Delaware Chancery Court, Kathaleen St. Judge McCormick said in order.
Elon Musk’s lawyers on Thursday moved to stay the trial in his dispute with Twitter and remove the trial, which was due to start in October, from the court calendar. Aug., and noted “changing circumstances that have effectively called this lawsuit into question,” according to a Thursday court filing.
The filing – which says the stay is “until the transaction closes” – comes after Musk earlier this week proposed course of action with the $44 billion acquisition of Twitter at the originally agreed conditions after months of trying to get out of the deal.
The filing states that Musk “is prepared to close the transaction at a price of $54.20, the debt financing parties are working cooperatively to fund closing, and closing is expected on or about October 28.” “.
But the filing also alludes to Twitter’s resistance to dropping the court case. “Twitter will not take yes for an answer. Amazingly, they have insisted on pursuing this litigation,” the letter said.
Twitter lawyers issued a harsh response to Musk’s filing. “The impediment to the termination of this litigation is not, as defendants say, that Twitter is unwilling to take a yes answer,” the letter said. “The obstacle is that the defendants still refuse to accept their contractual obligations.”
It notes that Musk has been trying to get out of the deal for months, and “now, on the eve of the trial, the defendants say they intend to go through with it after all.” ‘Trust us,’ they say, ‘we mean business this time.’”
“Until the defendants commit to closing down as required, Twitter is entitled to its day in court,” Twitter’s letter said. “The defendants can and should close next week. Until they do, this action is non-contentious and should be brought to justice.”
The back-and-forth offers the clearest indication yet that Musk’s funding could now be the central issue in the dispute between the Tesla CEO and Twitter over dropping the court case and completing the deal. Musk has previously said he would pay for the acquisition through a mix of debt commitments from financial institutions, equity funding from investors, and his own fortune.
However, legal experts have raised concerns that lenders are now going out of business amid recent changes in the debt market and the fall in value of social media companies. According to experts, Twitter would likely want to keep the legal battle as pressure on Musk unless he agrees to complete the deal with or without leverage.
In Thursday’s filing, Musk’s legal team said Twitter has resisted a suspension amid concerns that Musk made his offer to complete the deal conditional on receiving debt financing and that payment could fail. “The debt financing parties’ attorney has indicated that each of their clients is prepared to honor their commitments,” Musk’s filing reads.
The filing asks the court to stay the proceedings and order Twitter to close the deal.
“Not only is the court proceeding a tremendous waste of party and judicial resources, it will undermine the parties’ ability to complete the transaction,” the filing reads. “Rather than allowing the parties to focus on securing the debt financing needed to complete the transaction and preparing for a business transition, the parties will instead remain distracted completing investigations and unnecessary court proceedings.”
In their reply, Twitter’s attorneys explain that Musk’s team refused to “commit a closing date.” It added that a representative of one of the banks that would lend to Musk testified Thursday morning that “Mr. Musk has yet to send them a credit notice and has not otherwise advised them that he intends to complete the transaction, let alone on any specific timeline.
Twitter’s lawyers added: “The defendants should arrange for it to close on Monday October 10.”
Lawyers for Musk and Twitter on Thursday agreed to delay Tesla CEO testimony in the court case, a source familiar with the negotiations told CNN. Musk’s testimony was scheduled to begin on Thursday, according to a filing filed earlier this week. It’s not clear if a new date has been set for Musk’s testimony, but Twitter could be pushing to finalize it early next week if an agreement isn’t reached.
The two sides had yet to reach an agreement by Wednesday to complete the acquisition, a separate source told CNN. Registrar of the Delaware Chancery Court Kathaleen St. Jude McCormick, the judge overseeing the litigation, said in a court filing Wednesday that neither side requested a stay and she continues to prepare for the Oct. 4 trial to begin before. 17
On Thursday, McCormick filed a letter to both sides setting deadlines for responding to inquiries, noting that the “trial is fast approaching.”