Now that Twitter has filed a suit, Mr. Musk and his lawyers are expected to respond. While the timeline after that will depend on many factors, the company and Mr. Musk will most likely be summoned to a hearing in Delaware and go through the discovery process, with the two sides unearthing facts they believe are relevant to the case.
The case could then go to trial, although there is a chance the judge assigned to the case will reject Mr Musk’s attempts to run away. If the lawsuit goes through, the judge will rule whether Twitter’s disclosures were insufficient and materialized damage to the deal.
In the past, Delaware’s Chancery Court has prevented companies from trying to walk away from deals. For example, when Tyson Foods tried to refrain from acquiring the meat packer IBP in 2001, the court ruled that Tyson had to abide by the agreement. In situations where the court has allowed buyers to leave, it has required them to pay damages. According to most readings of Twitter’s contract with Mr. Musk, the damage would be limited to $1 billion.
Twitter and Mr. Musk have assembled legal teams to fight it out. Twitter’s efforts in Delaware are led by William Savitt, an attorney at Wachtell, Lipton, Rosen & Katz. Wachtell Lipton is known, among other things, for developing legal tactics to protect companies from hostile buyers, such as the so-called poison pill that Twitter originally introduced to defend itself against Mr. musk.
Mr. Savitt has experience before the Delaware’s Chancery Court and has previously defended companies against the likes of Carl Icahn and Pershing Square, the investment firm run by billionaire William Ackman. But Mr. Musk is unlike any of the other corporate raiders before him, which makes him a particularly complex adversary.
Mr. Musk’s legal team includes his personal attorney, Alex Spiro, as well as attorneys from Skadden, Arps, Slate, Meagher & Flom. Skadden is a renowned corporate law firm with extensive experience in pleading cases in the Delaware court, including luxury giant LVMH Moët Hennessy Louis Vuitton’s bid to break the $16 billion deal to acquire Tiffany & Company. Skadden’s customer, LVMH, ultimately shaved about $420 million off the purchase price.
Mike Isaac contributed reporting and Jack Begg research contributed.
