It’s weird to say this about a guy with 10 kids, but Elon Musk is sweating like a guy who just learned he wasn’t going on Maury Povich to get a makeover. Musk flirted with buying Twitter. Told his lawyers to forego using all the protections that corporate lawyers usually put in deals. And after the deal was done Musk tried to walk away leaving the jilted partner to seek recompense in court.
Because the deal remains and Elon is the father.
Today, Twitter’s shareholders voted to approve the deal, a necessary signpost on the road to Chancery. He’s now locked in unless he can successfully prove that he shouldn’t be responsible for the deal he made while recklessly blowing off due diligence. And weep for the straws, because Elon is grasping at them like a mad man.
Musk’s most recent attempt to throw shade on the deal is an amended counterclaim suggesting that a whistleblower has identified security lapses at the company and claims this amounts to a material adverse effect.
It’s a stronger claim than his labored attempt to say that he was misled about the number of bots on Twitter… even though he claimed he was buying Twitter because there were too many bots.
The whistleblower’s claim that Twitter runs out-of-date software exposing users to privacy breaches alone isn’t that useful to Musk since it’s exactly the sort of information he could’ve found out if he’d not blown off due diligence. BUT while these security issues alone might not give Musk an out, if they’re all true, it could amount to an FTC problem and Musk could claim that a potential government crackdown on the company crosses the finish line into a material problem.
That said, Twitter denies the whistleblower’s claims, saying that they are “riddled with inconsistencies and inaccuracies.”
Trial is in a little more than a month!
Earlier: Twitter Complaint Demonstrates That Every Lawyer, Everywhere, Always Is Smarter Than Elon Musk
Elon Musk Will Beat Twitter! WSJ Says It’s Obvious… Assuming You Change Every Single Fact And Law.
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.