On Thursday, the judge in charge of the takeover dispute between Twitter and Elon Musk decided to suspend the proceedings until October 28.
The break comes at Musk’s request and moves the Oct. 17 process to a different date.
The delay
Twitter initially rejected Musk’s request to suspend the deal, citing concern that Tesla’s CEO would break his promise to close the deal soon.
Delaware Chancery Court chancellor Kathaleen St. Judge McCormick said:
“If the transaction does not close by 5 pm on October 28, 2022, the parties are instructed to contact by email that evening to obtain November 2022 trial dates.”
On Thursday, Elon Musk’s attorneys filed a motion to suspend legal proceedings in his dispute with Twitter.
They also petitioned to remove the October 17 trial from the court’s calendar.
Musk’s lawyers noted that the changed circumstances made the action questionable.
The letter
The filing comes after Musk this week offered to acquire Twitter on its original terms after months of trying to pull out of the deal.
It says Tesla’s CEO is ready to close the deals for $54.20 per share and the debt financing parties are working together to fund the closing and schedule it for Oct. 28.
The filing also mentions Twitter’s opposition to dropping the lawsuit.
“Twitter will not take yes for an answer,” the letter said.
“Astonishingly, they have insisted on proceeding with this litigation.”
Twitter’s attorney issued a harsh response to Musk’s filing, writing:
“The obstacle to terminating this litigation is not, as Defendants say, that Twitter is unwilling to take yes for an answer.”
“The obstacle is that Defendants still refuse to accept their contractual obligations.”
The letter also states that Musk has spent months trying to end the deal, and as the trial draws closer, “Defendants declare they intend to close after all.”
“‘Trust us,’ they say, ‘We mean it this time,’” the letter continued.
“Until Defendants commit to close as required, Twitter is entitled to its day in Court.”
“Defendants can and should close next week. Until they do, this action is not moot and should be brought to trial.”
The filing
The exchange between Twitter and Elon Musk suggests that funding the Tesla CEO is central to the argument to drop the lawsuit and close the deal.
Musk previously said he would pay for the company through debt commitments from financial institutions, equity financing from investors and his own funds.
Legal experts have expressed concern that lenders are looking to get out of business amid recent changes in the debt market and the decline in value of social media companies.
Experts say Twitter likely wants the legal battle to keep Musk under pressure unless he agrees to complete the deal with or without leverage.
As for Musk’s legal delay, Thursday’s filing says the company resisted a stay, fearing he would make his deal-closing offer subject to securing debt financing and that the payment may fail.
“Counsel for the debt financing parties has advised that each of their clients is prepared to honor its obligation,” Musk’s filing reads.
Musk’s filing asked the court to adjourn the proceedings and requested Twitter to complete the settlement.
“Proceeding toward trial is not only an enormous waste of party and judicial resources, it will undermine the ability of the parties to close the transaction,” the filing reads.
“Instead of allowing the parties to turn their focus to securing the Debt Financing necessary to consummate the transaction and preparing for a transaction of the business, the parties will instead remain distracted by completing discovery and an unnecessary trial.”
Twitter lawyers said Musk’s team declined to commit to a closing date.
Their letter also said a representative from one of the banks that would provide loans to Musk said on Thursday morning that Musk had not yet sent them a loan notice.
Tesla’s CEO didn’t tell them he intended to complete the deal within a specific time frame.
Deposition
Earlier Thursday, attorneys for Musk and Twitter agreed to suspend the Tesla CEO’s testimony in the lawsuit.
Musk’s testimony was scheduled to begin Thursday.
While it’s unclear if there’s a new date for Musk’s impeachment, Twitter could push for it to be finalized early next week if no deal is reached.
Delaware Chancellor of the Court of Chancellor Kathaleen St. Jude McCormic said in a court filing Wednesday that neither party requested a stay of the case.
She said she was continuing to prepare for the trial, which was due to begin on October 17.
On Thursday, McCormick filed a letter to both parties setting deadlines for responding to questions, noting that the trial is approaching.
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