(Bloomberg) — Elon Musk got a judge to throw out most of a Twitter Inc. shareholder’s lawsuit over his effort to cancel his $44 billion buyout of the company, already the subject of a high-profile legal battle.
(Bloomberg) — Elon Musk got a judge to throw out most of a Twitter Inc. shareholder’s lawsuit over his effort to cancel his $44 billion buyout of the company, already the subject of a high-profile legal battle.
Delaware Chancery Judge Kathaleen St. J. McCormick on Tuesday dismissed the bulk of the suit, filed July 29, which targets Musk’s “lame rationales for reneging on his contract.”
A trial over Twitter’s own lawsuit to make Musk consummate the buyout, which was due to start in Wilmington next week, is on hold as the social media company weighs a last-minute effort by Musk to renew the deal.
Read More: Musk Revives $44 Billion Twitter Bid, Aiming to Avoid Trial
In the shareholder suit, the investor, Luigi Crispo, hasn’t “adequately alleged third-party beneficiary standing to specifically enforce the merger agreement,” the judge said.
She also tossed an allegation of breach of fiduciary duties. Because Crispo couldn’t show that Musk was Twitter’s controlling shareholder, he couldn’t make a legitimate claim that the billionaire had violated legal duties to other Twitter investors, she found.
That leaves arguments about whether Crispo has legal standing to bring breach-of-contract claims over the teetering merger. McCormick let that part of the case proceed, pending further briefing.
In July, Musk shunned the buyout he had proposed in April, alleging Twitter had vastly understated the extent of bots and spam on its platform, exaggerating the value and prospects of the company. Twitter says the claim is just a pretext for the world’s richest person to walk away from the deal amid a decline in financial markets and a massive case of buyer’s remorse.
The shareholder case is Crispo v. Musk, 2022-0666, Delaware Chancery Court (Wilmington).
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