A Delaware judge dealt Elon Musk a blow Tuesday by ruling that Twitter’s lawsuit seeking to force the billionaire to honor his purchase agreement can go to a five-day trial in October.
Chancellor Kathaleen St. Jude McCormick, chief judge of the Delaware Chancery Court, granted Twitter’s request for an expedited trial date, noting the damage a protracted legal fight would do to her business.
A delayed trial date requested by Musk “threatens irreparable harm to vendors and to Twitter,” McCormick said, according to The Washington Post.
Twitter sued Musk earlier this month after he announced he was pulling out of a deal to buy the company. Twitter sought an expedited trial, an issue McCormick resolved Tuesday.
musk’s lawyers argued that the trial should take place in February 2023 at the earliest due to the complexity of the case, saying they needed more time to further investigate Musk’s claim that Twitter was misrepresenting the number of spam bots on the platform.
McCormick rejected the argument, saying it “underestimates the ability of this court to quickly process litigation.”
Carl Tobias, a law professor at the University of Richmond, said The Associated Pressthe decision is a victory for Twitter “in terms of moving things forward.”
The judge, Tobias added, “seemed very concerned by the argument that the delay would seriously harm the company, and I think that’s true.”
This was the first time the two sides had appeared before a judge, setting the stage for a contentious trial. The hearing was held via Zoom, as McCormick had tested positive for covid.
Twitter attorney William Savitt called Musk a “committed enemy” of the social media giant. according to CNN.
Musk’s defense attorney, Andrew Rossman, called the claim “absurd,” noting that Musk remains the company’s second-largest shareholder, with a “much larger stake” in Twitter than the entire board of directors. according to AP.
Rossman reiterated Musk’s concerns that Twitter is underestimating the number of spam bots. The company has repeatedly said that spam accounts make up less than 5% of monetizable daily active users.
“We have reason to believe, based on what we have seen so far, that the actual numbers are significantly higher, with huge implications for the long-term value of the company.” Rossman said, according to CNN.
Still, Musk’s purchase deal was never tied to the number of spam bots, and Twitter never promised Musk that the number would be less than 5%. Musk also gave up his due diligence to close the deal faster.
“Nothing in the merger agreement revolves around that issue,” Savitt said. “There is no representation or warranty in the merger as it relates to how many fake accounts there may be on Twitter.”
Although both sides seemed poised for a court showdown, Twitter’s lawsuit against Musk could still be resolved in a number of ways, including a settlement.
Investors applauded Tuesday’s decision, sending shares of Twitter up as much as 5.4%. according to Bloomberg.