Musk’s Twitter subpoena storm gets everyone wet

WASHINGTON, August 19 (Reuters Breakingviews) – Elon Musk and Twitter (TWTR.N) they’re trying to steal each other’s dirty laundry by going after flashy tech players and white-shoe law firms. Tesla Lawyers (TSLA.O) chief have issued a wide range of subpoenas as part of the legal fight over the $44 billion purchase of the social network. Sales force (CRM.N), which considered buying Twitter in 2016, is the latest to be drawn into the dispute. That’s awkward since Twitter chairman Bret Taylor is the software company’s co-CEO. The parties have more incentives to reach an agreement.

The increasingly bitter legal battle is bad for both the buyer and the seller. Twitter sued musk in July to keep the deal after he said he was backing out due to alleged breaches of the merger agreement. Since then, they have deluged each other with requests for documents and depositions as they prepare for a trial in October, a major distraction for both Musk and Twitter CEO Parag Agrawal.

The wide web of legal requests increases the potential for embarrassment. Ad Technology Companies Integral Ad Science (NICO) and DoubleVerify (DV.N) were among others aforementioned on Thursday, according to documents filed in a Delaware court. Musk wants communications about Twitter account reviews to verify users; fake accounts are a major argument in the settlement. He even served Twitter law firm Wachtell, Lipton, Rosen & Katz, an unusual move in an M&A lawsuit.

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Twitter is also doing its part. He has subpoenas for people who planned to co-invest with Musk in buying Twitter, including Oracle. (ORCL.N) founder Larry Ellison and venture capitalist Marc Andreessen. He also wants information from Tesla and the banks offering financing for the Twitter deal, including Morgan Stanley. (MS.N). Even people whose involvement in the case is unclear, such as Citadel founder Ken Griffin, have also been named. He is listed as a potential co-investor of Musk.

Previous deal fights show just how revealing they can be. Take the Aerojet Rocketdyne (AJRD.N) battle for seats on board and a sale ruled out to Lockheed Martin (LMT.N). The company’s CEO, Eileen Drake, told a Delaware judge in May that Chairman Warren Lichtenstein offered to buy her a Hermes bag to entice her to change the terms of the deal.

Musk is not known for his discretion, while Twitter was quick to sell him. That means there could be a lot of skeletons in the closet. It is better for both parties, and everyone cited, to make sure that what happened in the Twitter settlement stays in the Twitter settlement.

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(The author is a columnist for Reuters Breakingviews. The opinions expressed are her own.)

CONTEXT NEWS

Lawyers for Elon Musk have issued subpoenas for Salesforce, Integral Ad Science and DoubleVerify as part of the Tesla CEO’s legal battle over the $44 billion purchase of Twitter, according to documents filed Aug. 18 in a Delaware court.

Twitter sued Musk to force him to uphold their agreement, which it said it had terminated for material breaches of their agreement. Twitter president Bret Taylor is co-CEO of Salesforce, while Integral Ad and DoubleVerify are ad tech companies. Musk looks for communications in the review of Twitter accounts to verify authentic users.

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Edited by Jennifer Saba and Sharon Lam

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The opinions expressed are those of the author. They do not reflect the views of Reuters News, which, according to the Trust Principles, is committed to integrity, independence and freedom from bias.

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