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Nonetheless, Mr. Musk’s menace of strolling away may convey Twitter again to the negotiating desk, permitting the billionaire to purchase the corporate at a reduction. The 2 sides may additionally settle with Mr. Musk paying damages to Twitter. Or he may pay a $1 billion breakup payment and stroll away, an possibility allowed solely beneath sure circumstances, similar to if Mr. Musk’s financing fell by.
If Mr. Musk efficiently disentangles himself from Twitter, it could possibly be disastrous for the corporate. Its inventory has fallen greater than 35 % beneath his provide of $54.20 per share. Twitter’s enterprise has additionally deteriorated in latest months. In Might, Mr. Agrawal mentioned in a memo to workers that the corporate had not lived as much as its enterprise and monetary targets.
Now that Twitter has sued, Mr. Musk and his legal professionals are anticipated to reply. Whereas the timeline past then will depend on many elements, the corporate and Mr. Musk will almost certainly be referred to as to a listening to in Delaware and undergo the invention course of, with the 2 sides digging up info they imagine are related to the case.
The case might then transfer to a trial, although there’s a likelihood the decide assigned to the case will dismiss Mr. Musk’s efforts to stroll away. If the go well with proceeds to trial, the decide will resolve whether or not Twitter’s disclosures had been inadequate and constituted a fabric hurt to the deal.
Prior to now, Delaware’s Chancery Court docket has prevented firms from attempting to stroll away from offers. In 2001, for instance, when Tyson Meals tried to again out of an acquisition of the meatpacker IBP, the courtroom dominated that Tyson needed to comply with by with the settlement. In conditions the place the courtroom has allowed consumers to exit, it has required them to pay damages. By most readings of Twitter’s contract with Mr. Musk, damages could be capped at $1 billion.
Twitter and Mr. Musk have assembled authorized groups to duke it out. Main Twitter’s efforts in Delaware is William Savitt, a lawyer at Wachtell, Lipton, Rosen & Katz. Wachtell Lipton is legendary for, amongst different issues, creating authorized techniques to guard firms from hostile consumers, just like the so-called poison tablet that Twitter initially put in place to defend itself towards Mr. Musk.
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