Judge Allows Twitter to Expedite Lawsuit Against Musk
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> The Court: In this case, Twitter seeks specific performance, and it is not at all apparent that damages could constitute a sufficient remedy to Twitter. https://twitter.com/chancery_daily/status/154943327265618739...
That's the judge implying that the remedy could very well be a forced completion of the purchase
And this dispute, while involving similar amounts of money, doesn't seem to have the same moral urgency to speed it along.
Because a sentence and how it is carried out are two (sometimes wildly) different things. Musk could lose the case and still drag the actual execution of his obligations for years.
Levine pointed out yesterday that some of the agreements Musk has in place to fund this operation will expire on April 2023, so he could wait until that date and say "whoops, I can't afford it now". I have no idea if that would stick but this case has been unusual since day zero.
The most important thing for Twitter is to get out of this mess, honestly, the sooner the better.
Basically all of Musks "money" is in the US, and much of it is even in Delaware Corporations. The judge can very easily extract whatever it takes from Musk if it comes to that.
* 13B from a party of banks (i.e. Morgan Stanley and friends), in exchange for who knows what (private equity?)
* 12.5B from pretty much the same party of banks but as a loan that takes Musk's TSLA stock as collateral
* 21B from Musk itself (idk under what conditions)
So he could easily "not afford it" if he wanted to.
Unless his net worth drops by about 75%, he can afford it.
If the court rules "the deal has to go forward" I don't see why other assets would be considered.
Also,
Net worth != seizable property.
Also,
Net worth >> real net worth > realizable assets > seizable assets.
To be honest, if Musk were ordered to pay the $44B today, out of his pocket, I don't think he would be able to.
All I'm saying is, even if Twitter wins (which I think they will, in the very long end), there's a long road between that decision and having the actual money (or stock or w/e) land in their hands.
On top of that, there's no way Musk could go to jail because of this (it'd be very hard to prove there was wrongdoing behind this), so there really is no pressure on him to pay the $44B, he could drag this on foreeeeveeeeeerrrr ...
If he won't cooperate, he could be jailed for contempt (they don't need to prove wrongdoing during the deal, disobeying a court order is itself enough). They could also probably just send a court order to his stock broker.
Having that second deal in place convinced the Twitter board that Musk had the money and the liquidity to pay the amount he offered for Twitter, but otherwise that deal is irrelevant for this case.
[0]: https://www.bloomberg.com/opinion/articles/2022-05-26/elon-c... (paywall bypass at https://archive.ph/e95rj)
On the contrary I think the most important thing for Twitter is to get $54/share for its shareholders, and liquidate. There is no alternative path with an exit anywhere near $54/share.
They might have a number in mind that they're aiming for to back away - say $10b. They might also have him agree not to start a potential competitor for 10 years.
On the flip side they might think the markets will remain down for some time and the premium price is worth going full scorched earth on Musk. In that case he'll have to eat some punitive financing costs or file bankruptcy - most likely the latter because I can't see him giving up his stake in Tesla and SpaceX.
> If they force him into bankruptcy they aren't going to get $44b.
Why not? He appears to still have the non-financed amount well covered by his Tesla, SpaceX, and other assets. Even if markets implode much further they'll still be able to recoup much more than the $1B cost Musk is hoping to get away with.
As described above, if the conditions to Parent’s and Acquisition Sub’s obligations to complete the Merger are satisfied and Parent fails to consummate the Merger as required pursuant to the Merger Agreement, including because the equity, debt and/or margin loan financing is not funded, Parent will be required to pay Twitter a termination fee of $1.0 billion.
Now, that said, there are likely to be good commercial, legal and practical reasons for them to settle this case, even if they win on specific performance. But the optics are terrible for Twitter’s board, and they’re all gonna get raked over the coals in the forthcoming shareholder litigation (which in inevitable regardless of how this winds up playing out).
If Musk gives some smaller amount of money, though still several billion, but the shareholders still own the company, that's not going to be too hard to sell as a win.
So to the extent Twitter is currently worth less than $44 billion and there’s a binding merger agreement that delivers $44 billion of value to the shareholders, the board has to do something to bridge that gap. A billion-dollar break fee ain’t gonna cut it. But sure, if at the end of the day the shareholders can retain ownership of Twitter, Inc. worth $25 billion (and the value of the company hasn’t been irreversibly impaired by this circus) and extract a $20 billion settlement from the acquirer, then were I a Twitter board member, I wouldn’t feel too worried giving my deposition about that outcome.
Still not a great look for anyone though.
Sometimes, hard lessons are necessary.
More:
https://www.bloomberg.com/opinion/articles/2022-07-19/let-s-...
Quoting guidelines: "Please don't post shallow dismissals, especially of other people's work [...]"
Sorry. I am trying to engage with everyone here respectfully. I generally feel people who write like this have anger issues or purely dismissive. The later seems true if I read the answer carefully enough. I don't think I have made a personal affront to him to receive one. And the opinion is honest - writing like this unprovoked, is not okay & outside of HN guidelines anyway
I didn't. I never said 'f--koff' or 'you're a idiotic fanboy' or the likes. Commentor sides Musk strongly enough to dismiss a neutral & not-loaded opinion sufficiently with strongly worded tirade. I told 'writing like this isn't okay' on HN & you could possibly need help with a full disclaimer I am not being sarcastic. And you're faulting me?
Edit: What he said is at least true even if it's not nice sounding
Going strictly by company laws, what Musk is doing is absolutely wrong - starting with SEC episode to the latest dropping of acquisition after purchase agreement. It doesn't matter if Elon isn't my tea-time buddy. By the same yardstick everyone should stop commenting on HN because 99% of the things posted on forums aren't exactly about our work life although we somewhat/vaguely know it.
Please let us not engage in this fault finding & keep discussion civil and interesting. Quoting guidelines:
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something"
If that doesn't come across unprovoked offensive, what else is. What have I written in OP to deserve such a scathing response. Why can't we keep discussion polite?
you're reading vitriol where I have none. It was a statement of fact followed by a statement of opinion. There was no vitriol involved except what you're projecting into it.
>maybe get some professional help.
Maybe now is a time to take a moment of deep self reflection and think how humbly you might suggest something, and who has vitriol
>Quoting guidelines
applies directly to your attempt to say that anyone who disagrees needs mental health. This should raise some deep questions of self reflection in you, rather than thinking that everyone else is shallow while your post is not.
There was nothing shallow about my post that your post is not equally if not more shallow.
As I said elsewhere, I am here to respectfully engage and learn something. Engaging with this post with you doesn't give me any new insight - neither on Twitter nor on common etiquettes.
given the multiple confirmations of this, it's possible that you don't realize the vitriol in your post, or mischaracterize it as not vitriol, or just are unwilling to admit to it to others or yourself
before you respond to this post, please ask yourself if you've internalized the critical feedback you've recieved from multiple users, and are not going to simply act defensive again
In fact it appears his offer to buy Twitter was not a well-researched and planned operation, it seems to have been something of a whim initially.
None of us can really know what he was thinking but for my part I think it is simple buyer's remorse. He didn't really consider the consequences of tying up his personal wealth in the deal, the potential to lose control of his other companies, nor how he would ever make his money back on Twitter itself. Perhaps he thought the bull market would erase all sins eventually anyway only to slam directly into a bear market wall.
Whatever the case his behavior seems erratic and unconsidered at times. As a shareholder I find that deeply disturbing. I would much rather he focus on running Tesla and SpaceX instead of trying to buy Twitter.
He’s certainly improved his position since a few months ago, when the Twitter board was discussing “poison pills” to stop his purchase of the company. Now, the same board is begging him to complete the purchase.
Also, there was a recent reminder from Musk’s legal team: as its largest shareholder, Musk has a greater financial stake in Twitter than the entire board combined.
You verbatim quoted the actual closing arguments of Rossman (representing Musk in the trial).
Just kidding. Yes, I wasn’t sure which document that was from and I didn’t want to use exact quotes without knowing. But I should have cited it (not that he’d mind), so I edited my post.
It was a smooth turn of phrase if you ask me. It helps that it’s the truth.
neither is the case
the same goes for your opinions you shared about "sabotage": unless you or he can prove that a majority of shareholders believe in such silly-sounding narratives, we can proceed as if they are untrue at best, and irrelevant to the contract elon signed at worst
Well for starters he didn’t want a Delaware venue and didn’t want an expedited trial. Lost on both. Doesn’t sound like someone who is in control of the situation.
>Now, the same board is begging him to complete the purchase.
A very interesting way of phrasing reality. “Asking a court to force Musk to adhere to the contract he signed an executed.”
If you don’t work in PR, you definitely should. You have a gift for it.
These are two separate incidents although commonly conflated. Poison pill is used to block a hostile takeover where the board has been taken by surprise, by diluting stake - which happened because Musk didnt disclose to SEC for long time he owned 14.4% of the Twitter.
After the things were in the light of the day, he didn't take up the position on Twitter board & instead offered to purchase controlling stake in Twitter (something which was not possible as a board member). The negotiations hence followed for purchase
Then, he has famously backed out of the Twitter deal in bad faith & disparaged it publicly. Twitter is also beholden to its investors. They have every right not to tank their market cap because a rich guy got whimsical
"Begging" is definitely not the best word choice here. This is a lot less, "Oh, please, please, pleeeeeease Mr. Musk, please pay us, pretty please?" and a lot more, "Alright, we're tired of you fucking around. It's time for you climb out of your sandbox and hold up your end of the deal."
How is that relevant to the contract Elon signed and now wants to renege on?
Src: https://www.nytimes.com/2022/07/11/business/dealbook/elon-mu...
The damages that Twitter can claim from this new lawsuit are not bound by the clauses of said contract.
Although, in this case, they just want the deal to go forward, at any moment Twitter could say "your marketing stint, or whatever that was, has cost us $X billion and we want compensation for that" and they have grounds for it.