Barbara Ortutay, The Associated Press
Published Thursday, August 4, 2022 5:51 PM EST
Last update Thursday, August 4, 2022, 7:04 PM EST
SAN FRANCISCO (Associated Press) – Twitter has denied in a lawsuit that it deprived billionaire and Tesla CEO Elon Musk of necessary information or misrepresented details about its business. Musk originally brought these charges to justify his attempt to back off a $44 billion deal to buy the social platform, which he later claimed was infested with far more “spam bots” and fake accounts than Twitter revealed.
The fate of this acquisition, which Musk agreed to without taking the time to examine the details of Twitter’s business, now rests with Delaware court as Twitter sued to force Musk to complete the deal. The case is due to go to trial on October 17.
The court’s ruling could ultimately determine the future of a social platform used daily by 238 million people around the world — an audience that is small by the standards of Facebook and other major platforms, but includes political leaders, major artists and experts on a variety of topics. Until January 2021, it was also the home of the then President of the United States, Donald Trump.
In an unexpected development, Twitter was able to provide its response to Musk before Musk’s counterclaims surfaced in public. A judge ruled on Wednesday that Musk’s counterclaim would be made public by Friday.
However, parts of Musk’s counterclaim were included in Twitter’s response. These include accusing the company of fraud and “delay tactics” and Musk providing “sterile and incomplete information” just to answer his questions about spam accounts and other company metrics. While Twitter has claimed that Musk is inventing reasons to abandon the company’s purchase, Musk’s lawyers say it is Twitter that is blocking the deal by “slowing down” and providing insufficient data for the billionaire’s requests.
In a response filed Thursday at Delaware Chancery Court, Twitter describes Musk’s reasoning as “a story, imagined in an attempt to escape a merger agreement that Musk no longer appeals to.”
Twitter’s response reads: “Counter-claims are a litigation-ready tale that goes against evidence and common sense.” Musk invents representations that Twitter never made, and then attempts to selectively use the extensive confidential data provided to him by Twitter to evoke a breach of those alleged representations.
At the same time, in response, Musk also accused Twitter of breaching their agreement by “blocking” his requests for information.
Musk’s representatives did not immediately respond to a letter for comment on Thursday.
Musk’s attorneys wanted to file a public version of their response and counterclaims in Delaware court Wednesday. But Twitter’s lawyers have complained that they need more time to review and possibly redact Musk’s sealed files, saying they refer “widely” to Twitter’s internal information and data given to Musk.
Musk, the world’s richest man, agreed in April to buy Twitter and make it private, offering $54.20 a share and vowing to relax the company’s controls on content and root out fake accounts. Among other things, Musk said he would bring Trump — who was banned from Twitter after the January 6, 2021 riots at the US Capitol — back to the podium.
But Musk said in July he wanted to back out of the deal, prompting Twitter to file a lawsuit to bind him to a “seller-friendly” agreement.
Musk says Twitter has failed to provide him with enough information about the number of fake accounts on his service. Twitter argues that Musk, the CEO of electric car maker and solar power company Tesla, is deliberately trying to scuttle the deal because market conditions have deteriorated and the takeover is no longer in his interests.
Either Musk or Twitter is entitled to a $1 billion dismantling fee if the other party is found to be responsible for the failure of the agreement. However, Twitter wants more, and is seeking a “performance specific” court order directing Musk to pursue the deal.
Associated Press writer Randall Chase contributed this story from Dover, Delaware.