Twitter has officially sued Elon Musk for trying to bail from his $44 billion deal to buy the social media company.
On Tuesday, Twitter Board Chairman Bret Taylor said the company filed the lawsuit in Delaware’s Court of Chancery “to hold Elon Musk accountable to his contractual obligations.”
According to CNBC, Twitter’s lawsuit claims Musk broke the binding merger agreement “because the deal he signed no longer serves his personal interests.”
The company’s 62-page complaint adds: “Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he—unlike every other party subject to Delaware contract law—is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”
The lawsuit is demanding the court force Musk to complete the acquisition of the social media company, which was originally announced in April. “Musk and his entities should be enjoined from further breaches,” it adds.
The lawsuit also accuses Musk of trying to ditch the deal because the value of his Tesla stock has “declined by more than $100 billion from its November 2021 peak.”
“So Musk wants out. Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders,” Twitter added. “This is in keeping with the tactics Musk has deployed against Twitter and its stockholders since earlier this year, when he started amassing an undisclosed stake in the company and continued to grow his position without required notification. It tracks the disdain he has shown for the company that one would have expected Musk, as its would-be steward, to protect.”
But according to Twitter, the company designed the merger agreement with conditions to prevent Musk from bailing. "Musk’s conduct simply confirms that he wants to escape the binding contract he freely signed, and to damage Twitter in the process," the lawsuit adds.
So far, Musk hasn’t responded to the lawsuit. But last Friday, he decided to terminate the merger agreement on claims Twitter failed to supply enough information about the number of spam and fake accounts on the social media platform.
In a tweet on Sunday, Musk indicated he’s ready to force Twitter to prove its claim about the spam/fake account numbers in court. According to The New York Times, Delaware's Court of Chancery has heard numerous corporate cases over the years, including on mergers and acquisitions, which is likely why Twitter decided to file the lawsuit there.