Musk apparently believes that unlike any other party subject to Delaware contract law, he is free to change his mind, destroy the company, disrupt its operations, destroy shareholder value and walk away. the lawsuit said.
The lawsuit kicks off one of the largest legal clashes in Wall Street history, involving one of the world’s most colorful entrepreneurs in a case that will instigate determined contract language.
On Friday, Musk said he ended the deal because Twitter violated the agreement by not responding to requests for information about fake or spam accounts on the platforms, which is fundamental to his business performance.
Musk, the CEO of electric vehicle maker Tesla, did not immediately respond to a request for comment.
The lawsuit accused Musk of “a long list” of merger agreement violations that “banned Twitter and his company.”
Shares of the social media platform closed at $34.06 on Tuesday, up 4.3%, but sharply below the levels above $50 where it traded when the deal was accepted by Twitter’s board in late April.
Musk said he was terminating the merger due to lack of information about spam accounts and inaccurate statements that he said amounted to a “material adverse event.”
He also said the departures of executives amounted to not doing business in the normal way, as Twitter was required to do.
Twitter said it had negotiated to remove language from the merger agreement that would have made such layoffs a violation of the normal course of business.
Twitter called the reasons cited by Musk a “pretext” that had no merit and said his decision to walk away had more to do with a stock market decline, particularly for technology stocks.
Shares of Tesla, the main source of Musk’s fortune, have lost 30% of its value since the deal was announced and closed Tuesday for $699.21 dollars.
Legal experts have said that based on the information made public, Twitter appears to have the upper hand because of the way Musk negotiated the deal, refusing to do the traditional pre-merger fervor.