CALIFORNIA (Reuters) – Elon Musk countersued Twitter Inc., taking his legal battle with the social media company over his plan to back out of the $44 billion purchase to a new level. The lawsuit was filed in secret, but it shows that Musk is getting more serious in his fight with Twitter.
The 164-page document was not available to the public, but court rules say that a version that has been edited could be made public soon.
Musk’s lawsuit was filed just hours after Chancellor Kathaleen McCormick of the Delaware Court of Chancery ordered a five-day trial to start on Oct. 17 to decide if Musk can back out of the deal.
When asked for a comment, Twitter didn’t immediately answer.
Also on Friday, a Twitter shareholder sued Musk, asking the court to order the billionaire to close the deal, find that he broke his duty to Twitter shareholders, and pay damages for the losses he caused.
The lawsuit, which wants class status, says that Musk has a fiduciary duty to Twitter’s shareholders because he owns 9.6% of the company and because the takeover agreement gives him a say in many of the company’s decisions. Luigi Crispo, who owns 5,500 shares of Twitter, filed the lawsuit in the Court of Chancery.
On July 8, Musk, the richest person in the world and CEO of Tesla Inc, said that he was giving up on the takeover and that Twitter Inc had broken the agreement by lying about how many fake accounts were on its platform.
A few days later, Twitter sued, saying that Musk’s claims about fake accounts were a distraction and that the merger contract required Musk to close the deal at $54.20 per share. On Friday, the company’s shares closed at $41.61, which was the highest close since Musk pulled out of the deal.
McCormick rushed the case to trial last week because she didn’t want the deal’s uncertainty to harm Twitter too much.
Twitter says that the court battle is the reason why revenue is going down and the company is in chaos.
The trial was set for October 17, but the two sides couldn’t agree on how much discovery, or access to internal documents and other evidence, could be used.
This week, Musk said that Twitter was taking too long to respond to his discovery requests. The company said that Musk was asking for a lot of data that had nothing to do with the main issue in the case, which was whether Musk had broken the deal contract.
In her order from Friday, the chief judge seemed to think that discovery disputes would happen.
McCormick said, “This order doesn’t settle any specific discovery disputes, like whether or not requests for large data sets are fair.”
Musk will also go to court in Wilmington, Delaware, on Oct. 24 for a trial that will last a week. A Tesla shareholder wants to get rid of the electric car company’s CEO’s record-setting $56 billion pay package, calling it corporate waste and unfair enrichment.
