Musk and Twitter may reach agreement to end court battle on Wednesday: source

WILMINGTON, Del., Oct 5 (Reuters) – Elon Musk and Twitter Inc. (TWTR.N) could reach an agreement to end their litigation as early as Wednesday and clear the way for the world’s richest person to close his $44 billion deal for the social media platform, a source familiar with the matter told Reuters. the litigation.

Chancellor Kathaleen McCormick, a Delaware Chancery Court Judge, wrote: “The parties have not filed a stipulation to stay this action, nor has either party moved to stay it. Therefore, I continue to press for our trial to begin.” “. on October 17, 2022.”

Musk, who is also CEO of electric carmaker Tesla Inc. (TSLA.O)he proposed to Twitter on Monday night that he would change course and honor his April deal to buy the company for $54.20 a share if Twitter dropped litigation against him.

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Musk’s proposal on Monday included the condition that the deal close pending receipt of the necessary debt financing. The potential deal would likely remove that condition, said the source, who requested anonymity as the discussions are confidential.

Twitter’s legal team and Musk’s lawyers updated the judge on Tuesday with their attempts to try to overcome mutual mistrust and find a process to close the deal.

An attorney representing a proposed class action lawsuit against Musk on behalf of Twitter shareholders has written to McCormick to say that Musk should be required to make a “substantial deposit” should he again default on his commitment to shut down. Musk should also be liable for interest for delays in closing the deal, the letter from attorney Michael Hanrahan says.

Musk is scheduled to be deposed on Thursday in Austin, Texas, providing Twitter leverage in talks to close the deal.

Musk withdrew a statement in late September, citing concerns about a Twitter lawyer’s possible exposure to someone who later tested positive for COVID-19, according to a court filing made public Wednesday.

Shares of Twitter were down 1.3% at $51.35 on Wednesday afternoon. Shares hit their highest level on Tuesday since Musk and Twitter agreed in April that he would buy the company for $54.20 a share.

Musk said in July that he was walking away from the acquisition deal because he found that Twitter had allegedly misled him about the number of fake accounts, among other claims.

Part of Musk’s case was based on allegations by Twitter whistleblower Peiter “Mudge” Zatko that were made public in August.

Twitter’s legal team wanted to investigate whether Quinn Emanuel’s attorney, Alex Spiro, who led Musk’s case, contacted the whistleblower as early as May. The law firm has said in court documents that its attorneys did not contact Zatko or his representatives.

Spiro did not immediately respond to a request for comment.

Twitter discovered an anonymous May 6 email to Spiro from “a former executive of leading Twitter teams directly involving trust and security/content moderation,” according to court documents. The sender offered to communicate “through alternative means.”

Zatko, who was Twitter’s chief of security until he was fired in January, said under oath that he did not contact Musk or Musk’s lawyers at Quinn Emanuel.

McCormick, the Delaware Chancery Court judge, said in a ruling Monday that it is “at least plausible” that Zatko sent the anonymous email. He ordered Spiro to file a statement with the court by 4:30 pm EDT Wednesday explaining his actions regarding the May 6 email.

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Reporting by Tom Hals in Wilmington, Del., and Anirban Sen in New York Editing by Nick Zieminski and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

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