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Elon Musk lost his fight to delay Twitter’s lawsuit against him as a judge on Tuesday set an October trial, citing the “cloud of uncertainty” over the social media company after the billionaire backed out of a deal to buy it.
Twitter wants the billionaire to make good on his April promise to buy the social media giant for $44 billion (€42 billion).
Musk, the world’s richest man, pledged to pay $54.20 (€52.70) a share for Twitter but now wants to back out of the agreement.
“The continued uncertainty inflicts harm to Twitter every hour of every day,” said William Savitt, an attorney for Twitter, at the hearing that was being conducted remotely after the judge, Chancellor Kathaleen McCormick, tested positive on Monday for COVID-19.
The San Francisco-based company is seeking to resolve months of uncertainty for its business as Musk tries to walk away from the deal over what he says are Twitter’s “spam” accounts that he says are fundamental to its value.
Twitter wants an expedited trial in September because it said Musk is smearing Twitter and undermining operations by refusing to approve business initiatives, such as an employee retention plan.
The company said adopting Musk’s “slow walk” proposal for a 2023 trial leaves little time for additional litigation over deal financing if Musk is ordered to close. The deal financing expires in April.
Musk on Friday accused Twitter of seeking a “warp speed” trial to “railroad” him into buying the company.
Since agreeing in April to buy Twitter, Musk has questioned whether the company misled regulators about fake accounts and bots and said he has proposed a February trial to give him adequate time to investigate.
Twitter’s stock has slumped from above $50 (€48.79) a share when the deal was announced to as low as $32.55 (€31.76) last week.
It was trading up about 2 per cent higher on Tuesday morning and near the highest level since Musk said he was walking away.
Minor Myers, a professor at UConn School of Law, said he expected McCormick to adopt a trial schedule close to Twitter’s proposal.
“The longer it drags on, the more distraction for Twitter,” he said. “There’s more risk, more things that can go wrong”.
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