By Gary Bai
Tesla CEO Elon Musk has filed a counterclaim against Twitter after the social media company sued the billionaire for walking away from a $44 billion purchase deal.
Musk’s counterclaims are an abrupt escalation in the legal battle between a big tech company and the richest man in the world, where Twitter is suing Musk to complete the deal he entered into with Twitter on April 25.
Musk’s move against Twitter was made public a day after Delaware Chancery Court Judge Kathaleen McCormick, the judge overseeing the lawsuit, ordered that the five-day trial was to begin on Oct. 17, 2022.
McCormick ordered Twitter to answer the counterclaim on or before Aug. 4, 2022. The discovery phase of the lawsuit ends in the first half of September.
It is unclear, as of now, when the public version of Musk’s counterclaim will be available. The Wall Street Journal confirmed that a redacted version of Musk’s counterclaim would be available “as soon as next week.”
While the court file was not immediately accessible to the public, Musk’s legal team had repeatedly hinged its argument on the number of bot accounts on the social media platform, a piece of information that Musk’s lawyers say was made available to them only after the signing of the deal, but could “significantly impact” Twitter’s profitability.
“The core dispute over false and spam accounts is fundamental to Twitter’s value. It is also extremely fact and expert intensive, requiring substantial time for discovery,” Musk’s lawyers said in a July 15 filing requesting a February 2023 trial date, adding that Twitter’s refusal to provide this information drove Musk to file to walk away from the deal on July 8.
Musk’s lawyers assert that the platform’s monetizable daily active users metric is indicative of the proportion of bot accounts on the social media platform. An avid Twitter user himself, Musk previously alluded on Twitter that the discovery may lead to more insights into the proportion of bots on Twitter and, therefore, the platform’s profitability.
Meanwhile, Twitter, in a July 19 hearing arguing date, said that Musk has been trying to “sabotage” the social media company by requesting an “unreasonably elongated” schedule.
“Musk has been and remains contractually obligated to use his best efforts to close this deal,” William Savitt, the attorney representing Twitter, said during the hearing. Twitter requested during the hearing that a trial take place in September 2022.
“What he’s doing is the exact opposite; it’s sabotage,” Savitt said.
Judge McCormick, who presided over the hearing, sided closer to Twitter and ordered that a five-day trial take place in October 2022.
“The reality is that delay threatens irreparable harm to the sellers,” McCormick said in her ruling, referring to Twitter. “The longer the delay, the greater the risk.”