Elon Musk Files To Back Out Of Twitter Deal

Elon Musk might be headed for a courtroom fight with social media giant Twitter, in the wake of Musk dropping out of his $44 billion proposal to buy the company out, The Wall Street Journal reported Saturday (July 9).

Twitter has vowed to follow through on making Musk complete the deal. The company said it plans to take legal action, and the report noted that Twitter might file a lawsuit any time in the Delaware Court of Chancery, saying he has to complete the deal.

According to corporate law experts quoted in the report, Twitter might have the more grounded legal footing. Musk, meanwhile, had accused Twitter of breaching its contract.

Read More: Elon Musk Threatens To Abandon $44 Billion Twitter Deal

Legal experts speaking to the Journal reportedly said that if Twitter does win in court, there will be a question of whether it can force Musk to buy the company even if he no longer wants to own it.

To this end, there’s been little precedent — one example quoted by in the report is from 2008, when Apollo Global Management was forced to do the best it could to close a deal for $6.5 billion to buy Huntsman Corp, a chemical maker, after Apollo tried to back out. In that case, Apollo and Huntsman ultimately settled and Apollo agreed to pay a large fine instead.

“What are they going to do if there is a judgment and he says, ‘Well, I’m still not going to buy it’?” said Zohar Goshen, professor of transactional law at Columbia Law School. “They don’t really have tools to force him to go through with it. You don’t put people in jail because they don’t buy something.”

Musk had been sued by Twitter investors earlier this year following a big purches of shares by the celebrity billionaire, claiming he manipulated the company’s stock price downward in order to benefit from his planned purchase.

Musk also recently spoke at the Allen & Co Sun Valley Conference in Idaho, though he didn’t speak about the Twitter deal, according to sources.

The speech wasn’t accessible to reporters. According to the sources, Musk’s speech focused more on the idea of colonizing Mars and boosting population rates on Earth — the latter issue becoming a talking point since it was revealed he had twins with an executive at brain chip startup Neuralink.