A five-day trial was scheduled to begin on October 17 and Musk was supposed to be deposed on Thursday.
Published On 6 Oct 2022
A Delaware judge ordered a halt to Twitter Inc’s lawsuit against Elon Musk until 5 pm ET on October 28 to permit the billionaire’s takeover deal to close, according to a Thursday court filing.
Earlier Twitter had expressed opposition to Musk’s request that a judge halt its lawsuit against him and said he should close his purchase of the company for $44bn next week and until he closes the deal the litigation should head to trial.
Musk said this week he would purchase Twitter at the price he agreed in April, $54.20 per share, but conditioned the deal on receiving debt financing.
Banks are working cooperatively to fund the deal, which is expected to close on or around October 28, the court filing said.
“As a result, there is no need for an expedited trial to order defendants to do what they are already doing and this action is now moot,” said the filing.
Musk committed to buying Twitter in April, but soon soured on the deal. The social media company then went to court seeking an order for Musk to go through with the deal.
A five-day trial is scheduled to begin on October 17 and Musk was supposed to be deposed on Thursday, although the parties mutually agreed to postpone his interview, sources told Reuters news agency.
Musk said lawyers representing the debt financing parties have reassured him they are prepared to honour their obligations. Continuing the litigation would require a trial and appeals, and could drag out payment to Twitter’s shareholders by months, the filing said.
“Twitter will not take yes for an answer. Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders’ interests,” the filing said.
Musk, who is also chief executive of Tesla Inc, asked for an immediate hearing, according to a letter to Chancellor Kathaleen McCormick of Delaware’s Court of Chancery.
Twitter shares ended the day down 3.7 percent, at $49.39, on the New York Stock Exchange.
‘A lot of mistrust’
Since Musk made his offer on Monday, talks have dragged on longer than some initially expected, according to sources close to the litigation.
Wedbush analyst Dan Ives said it “would be an understatement” to say talks between both sides were going poorly. “There is a lot of mistrust for obvious reasons,” he said.
Major banks that committed to fund $12.5bn, or about 28 percent of the deal, could be facing hefty losses as the swift pace of interest rate hikes has ratcheted up market volatility and dampened appetite for leveraged financing.
“There’s still some uncertainty based on whether or not Elon can find the actual financing to do the deal,” said Managing Director of Trading and Derivatives for the Schwab Center, Randy Frederick.
Musk has raised $15.4bn by selling Tesla shares this year and is leaning on large investors for a chunk of the financing, leading to speculation over whether he will sell more of the electric-vehicle maker’s stock to fund the deal.
“Financing will eventually end up going through one way or another. It is just a point of negotiating terms at this stage,” said Managing Director at Concenture Wealth Management, Robert Gilliland.
from
https://dentoncountynewsonline.com/twitter-vs-musk-judge-halts-lawsuit-to-allow-deal-closing-al-jazeera-english/
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