The Elon Musk-Twitter Saga Now Moves to the Courts

“The worst-case scenario for the court is that it makes an order and that he doesn’t comply, and they have to figure out what to do about it,” said Morgan Ricks, a professor at Vanderbilt Law School.

While Mr. Musk typically relies on a small circle of confidants to run his businesses, which include the rocket maker SpaceX, he has brought in a larger legal team to supervise the Twitter acquisition. In addition to his personal lawyer, Alex Spiro, he tapped attorneys from Skadden, Arps, Slate, Meagher Flom.

Skadden is a go-to corporate law firm, with ample experience arguing cases in front of the Delaware court, including LVMH’s attempt to break off its acquisition of Tiffany.

On its side, Twitter has deployed lawyers from two firms, Wilson Sonsini Goodrich Rosati and Simpson Thacher Bartlett, to manage the deal. Wilson Sonsini is Twitter’s longtime legal counsel, which built its reputation on deals in venture capital and technology. Simpson Thacher is a New York-based law firm with more experience in general corporate mergers and acquisitions.

If Twitter renegotiates its acquisition price or accepts a breakup, it will probably face more legal problems. Shareholders would sue over either scenario, adding to several shareholder lawsuits Twitter is already facing over the acquisition. In April, financial analysts called Mr. Musk’s price a lowball offer, and Twitter shareholders could balk if the company agrees to further reduce its acquisition price.

A breakup could also bring added legal scrutiny to Mr. Musk. The Securities and Exchange Commission revealed in May that it was examining Mr. Musk’s purchases of Twitter stock and whether he properly disclosed his stake and his intentions for the social media company. In 2018, the regulator secured a $40 million settlement from Mr. Musk and Tesla over charges that his tweet falsely claiming he had secured funding to take Tesla private amounted to securities fraud.

Article source: https://www.nytimes.com/2022/07/09/technology/twitter-elon-musk-lawsuit.html