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Comment by redact207 | Hacker News Reader

My guess is he's hit that obscene level of wealth and realizes he is now beyond the controls of the system, and can therefore game it to his advantage.

When you can afford the best legal team money can buy and payoff the rest of the gatekeepers, then the game is simply to transfer wealth into your own pocket in bigger chunks.

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You can’t bribe the judges in Delaware. They can force him to go through with the deal at the agreed price, now at a significant premium on market value, and it’s reasonably likely they will. This was not a genius move.

It should be noted that this is largely because Musk agreed to it.

The normal remedy for breach of contract is for the breaching party to have to pay the other party monetary damages sufficient to put the other party in the monetary position they would have been in had the contract not been breached. Court generally will only order someone to actually go through with the contract (which is called specific performance) if monetary damages won't work for some reason.

For example if we have a contract for me to sell you a million microcontrollers at $1 each, which you are going to use to make a million units of some gadget that you are going to sell for a profit of $0.10 each, and I find someone who will give me $2 each for the microcontrollers and so let you know I'm going to breach the contract and sell my microcontrollers to them, a court is very unlikely to order me to honor the contract. They will order me to pay you $100k, the profit you were anticipating making from our deal (and probably attorney fees, and other costs you'd incur dealing with the breach).

But, according to this blog [1] at Findlaw:

> If Musk tries to abandon the deal, Twitter could sue him and ask for specific performance. This remedy is usually hard to get, but Musk agreed to a powerful specific performance clause in the merger agreement. In fact, he didn't just agree that Twitter could get specific performance. He promised that he wouldn't argue it couldn't (forgive the double-negative).

I'm unable to think of any good reason one would agree to that.

[1] https://www.findlaw.com/legalblogs/courtside/is-elon-musk-go...

I think the past few years of watching the rule of law degrade in both the public and private world in the US means we shouldn’t take any possibly off the table that relies on the system working correctly

Let’s see what happens. I doubt very much the scenario you outline will come to pass. Nobody wants this deal any more and he can drag all their dirty laundry into it (bots, fake daus etc).

This will just slowly fade from memory as the lawyers argue and at some point they’ll settle.

> Let’s see what happens. I doubt very much the scenario you outline will come to pass. Nobody wants this deal any more and he can drag all their dirty laundry into it (bots, fake daus etc).

Twitter shareholders do. If I hold $1m in TWTR today, this deal going through is worth around 500K to me, possibly more if we assume the share value now prices in the buyout potential and will drop otherwise.

Carl Icahn or Paul Singer would love to deal with it. They might well settle, but it might well be for $15 bill.

I think it’s far more likely he’d be on the hook for damages. It would be unusual for a judge to force a sale to a now unwilling buyer. Everyone—Twitter, Twitter shareholders, Musk—would be worse off with that result.

Twitter shareholders would be worse off.. how? $54.20 is 55% higher than the current after-hours TWTR share price of $35

They can still get cash. Lots and lots of cash.

I suppose shareholders wouldn’t mind a special dividend from lawsuit proceeds that captured a good portion of the spread between FMV and $54.20, especially if they get to keep their equity.

Yep, and I'd guess that's the most likely outcome.

twitter share price is currently lower than what he bid, so twitter shareholders would be materially better off

I'm no expert, so what makes Delaware judges specially incorruptible?

I mean, besides the fact that generally I don't think overt corruption is that much of a problem in the U.S., the fact that anyone involved with this case will be under a massive microscope and that Delaware as the general standard place to do business deals with many large transactions so this one may not be all that impressive to local judges

Delaware sets the gold standard on corporate law, and has a special courts of law and equity (the CCLD division and the Court of Chancery) that are set up to handle high-value corporate matters.

I don’t think most American judges are susceptible to any kind of bribery (other than jurisdictions where elected judges may expect campaign donations from litigants), but Delaware has to be among the absolute least likely to have that issue.

Their reputation and their being paid very well to handle a huge proportion of corporate law in America efficiently and fairly. They’re a huge part of the reason everyone domiciles their companies there.

Ok. I had understood corporations chose Delaware merely because of the anti-consumer bias in Delaware's laws, but it's good to hear otherwise.

That may have been part of the original reasoning, but now Delaware has built up the world’s most reliable corporate legal system, and companies like a reliable legal system very much.

Honestly, so what if he's out $60 bn. I don't think this would affect his lifestyle in any way whatsoever. But it would affect his high score. I'm guessing at one point he realized the former but later realized the latter and cared more about that. Though he's still got a 88bn lead on second place so I'm not sure why he cares.

No matter what it won't be him fronting all the money, he had institutional investors that were ponying up a huge amount of the dough alongside him.

Not sure it's going to affect his probably-not-that-lavish lifestyle that much. But since those billions are in stock it likely it will affect his level of control of companies, his ability to attract future investments and his future decisions. Which people paying attention to tech companies probably care about more than what flavour caviar he eats and what schools his kids go to anyway.

He's overleveraged and most of his companies are on the brink of falling below the point where he gets margin called. The poor sap wanted to rescue a few billions of dollars that could actually survive a recession, but he picked the wrong way to do it.

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