Tech

Can Elon Musk challenge the court if ordered to buy Twitter?


Twitter Inc sued Elon Musk to force him to make a $44 billion acquisition of the social media company.

Twitter Inc sued Elon Musk to force him to make a $44 billion acquisition of the social media company. What if Twitter succeeds and the richest man in the world, who regularly mocks securities regulators, refuses to comply with a court order?

CAN I ORDER A MUSK COURT TO BUY TWITTER?

Twitter is asking a Delaware court to grant “specific performance” under the terms of Musk’s contract — in other words, forcing him to complete the acquisition at an agreed-upon price of $54.20 per share. promissory note.

The court has issued such an order before. In 2001, chicken processor Tyson Foods Inc was ordered to complete a $3.2 billion deal for meatpacking company IBP Inc. Last year, a court ordered private equity firm Kohlberg & Co LLC to close $550 million to buy DecoPac Holding Inc., which makes cake decorating products.

But the buyers in these cases are companies rather than individuals. Never before has such specific performance been granted a deal of this scale.

IF MUSK resists?

The legal battle between Musk and Twitter will take place in Delaware’s Premier Court, set out in the merger agreement over the disputes.

Delaware is also a popular founding destination for most American public companies, including Tesla Inc and other Musk companies like the Boring Co and Space Exploration Technologies Corp tunneling venture, known as SpaceX.

That gives the court jurisdiction over a large chunk of Musk’s assets to enforce compliance if needed. Lawyers said the court would start by holding Musk in contempt and fines until he follows the order.

Francis Pileggi, an attorney for Lewis Brisbois in Wilmington, Delaware, said: “The court has sufficient powers to enforce its orders.

If Musk continues to ignore the ruling, the court could order Tesla and other companies founded by Delaware in which Musk owns shares to freeze his assets or transfer shares.

Minor Myers, a professor at UConn School of Law, said: “He’s going to be treated like a deadlocked father when he doesn’t pay child support. “It won’t be that hard.”

WHAT HAS THE COURT WORKED IN THE PAST?

When ZST Digital Networks Inc founded by Delaware was sued by one of Delaware’s largest outside shareholders in 2012 for access to its books amid unusual accounting circumstances, the Chinese company denied it. follow. Travis Laster, the vice-chancellor or judge of the Premier Court, appointed the company’s recipients to force it to turn over the records. He also allows recipients to seek to arrest executives if they visit the United States.

Courts have also forced companies to comply with the orders by warning directors that they will be personally liable for the accumulation of fines.

Ann Lipton, a professor at Tulane University Law School, says there are many examples of individuals who oppose court rulings who use appeal to entice compliance. But they eventually obeyed the court order, and she hopes Musk will too.

“He didn’t really lose his mind,” she said.





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