Elon Musk is planning to seek a delay in the trial over his $44 billion proposed buyout of Twitter Inc. until as late as December, amid new whistle-blower revelations about the company’s response to bot accounts, according to people familiar with Musk’s strategy.
(Bloomberg) — Elon Musk is planning to seek a delay in the trial over his $44 billion proposed buyout of Twitter Inc. until as late as December, amid new whistle-blower revelations about the company’s response to bot accounts, according to people familiar with Musk’s strategy.
In a Tuesday court filing, Musk had proposed the Oct. 17 trial be pushed to some time in November, but the people said he is preparing ask Delaware Chancery Court Judge Kathaleen St. J. McCormick for delay until early December. He wants more time so he can properly assess the claims former Twitter computer security head Peiter Zatko made last week in a whistle-blower complaint to regulators and Congress.
Zatko said that he raised concerns about the numbers of robot and spam accounts but was ignored. Twitter is suing Musk to force him to complete the deal, but the billionaire says the company’s misleading statements about bot accounts give him a valid reason to cancel his $54.20-per-share offer.
A December trial would get Musk closer to the February date he originally suggested shortly after Twitter filed the case in July. McCormack fast-tracked the case over his objection.
Musk proposed a November trial as part of his request to amend his counterclaims, which was filed under seal Tuesday in Delaware Chancery Court. According to the people, Musk wants to add Zatko’s allegation that Twitter had “egregious deficiencies” in protecting users’ accounts from hackers as further justification of his decision to nix the deal.
He also contends Twitter executives knew about Zatko’s claims but didn’t disclose them when they agreed to the deal in April, the people said. Twitter also allegedly refused to turn over Zatko’s internal files and emails as part of the litigation, saying they weren’t relevant.
A Twitter representative declined to comment but noted that the company’s lawyers said again Tuesday in court and regulatory filings that Musk’s case for terminating the deal is “invalid and wrongful.”
Brian Quinn, a Boston College law professor, said Zatko’s claims will likely result in a trial delay. “I’d be shocked if Judge McCormick doesn’t push this trial back to give both sides more time to weigh this whistle-blower’s stuff,” he said.
Twitter has said spam and robot accounts make up about 5% of its customer base. The billionaire contends his analysis shows a third of Twitter’s more than 230 million users may fall into the bot category.
The case is Twitter v. Musk, 22-0613, Delaware Chancery Court (Wilmington).
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