SAN FRANCISCO (AP) — Twitter denied in a lawsuit that it deprived its potential acquirer, billionaire Tesla CEO Elon Musk, of necessary information or false details about the business. Musk originally made these allegations to justify his attempt to back out of a $44 billion deal to buy the social platform, which he later claimed was infested with a much larger number of “spam bots” and fake accounts than Twitter had revealed.
The fate of the acquisition, which Musk agreed to without taking the time to examine the details of Twitter’s operations, now rests in a Delaware court where Twitter sued to force Musk to complete the deal. The case is scheduled to go before the court on 17 October.
The court’s decision could ultimately determine the future of a social platform used daily by 238 million people worldwide – a small audience by the standards of Facebook and other major platforms, but one that includes political leaders, major entertainers and experts in a variety of subject. Until January 2021, it was also the home of the then US president, Donald Trump.
In an unexpected twist, Twitter was able to file its response to Musk before Musk’s own counterclaims have appeared publicly. A judge ruled Wednesday that Musk’s counterclaim will be made public by Friday.
However, parts of Musk’s counterclaim were included in Twitter’s response. These include accusing the company of fraud and “delay tactics” and giving Musk only “sanitized, incomplete information” in response to his questions about spam accounts and other company statistics. While Twitter has argued that Musk is making up reasons to get out of buying the company, Musk’s lawyers say Twitter is holding up the deal by “dragging its feet” and providing insufficient data to the billionaire’s requests.
In a response filed Thursday in Delaware Chancery Court, Twitter calls Musk’s reasoning “a story, concocted in an attempt to escape a merger deal that Musk no longer found attractive.”
“The counterclaims are a made-up narrative contradicted by the evidence and common sense,” Twitter’s response said. “Musk makes up representations that Twitter never made and then tries to use, selectively, the extensive confidential data Twitter gave him to conjure up a violation of those alleged representations.”
At the same time, the response said, Musk also accused Twitter of violating their agreement by “stonewalling” his information requests.
Representatives for Musk did not immediately return a message for comment Thursday.
Lawyers for Musk had wanted to file a public version of the answer and counterclaim in Delaware court on Wednesday. But Twitter lawyers complained they needed more time to review and potentially remove Musk’s sealed filing, saying it refers “extensively” to internal Twitter information and data provided to Musk.
Musk, the world’s richest man, agreed in April to buy Twitter and take it private, offering $54.20 a share and promising to loosen the company’s content policies and root out fake accounts. Musk said, among other things, that he would restore Trump – who was banned from Twitter after the riots on January 6, 2021 at the US capital – to the platform.
But Musk said in July that he wanted out of the deal, prompting Twitter to file a lawsuit to hold him to the “seller-friendly” deal.
Musk says Twitter hasn’t given him enough information about the number of fake accounts on the service. Twitter argues that Musk, CEO of electric car maker and solar energy company Tesla Inc., is deliberately trying to tank the deal because market conditions have worsened and the acquisition no longer serves his interests.
Either Musk or Twitter will be entitled to a $1 billion breakup fee if the other party is found responsible for the deal’s failure. Twitter wants more, however, and is seeking a court order for “specific performance” ordering Musk to follow through on the deal.
Associated Press Writer Randall Chase contributed to this story from Dover, Delaware.