Attorneys for Elon Musk and Twitter Inc. TWTR 0.05% discussed the fate of their stalled $44 billion merger agreement during a Delaware Chancery Court hearing, including the pace and substance of the discovery process, the relevance of a whistleblower complaint and the timing of the process.
During the first half of Tuesday’s hearing, attorneys from each side took turns arguing before Chancellor Kathaleen McCormick about so-called investigative motions, or her various requests for information. They are expected to argue later in the hearing over whether Mr Musk should be able to add claims made by a whistleblower, former Twitter security chief Peiter Zatko, to his counterclaims.
“It was hide and seek with them,” said Andrew Rossman, one of Mr. Musk’s attorneys. “You’re not answering our basic questions. You take a deep breath.”
Mr Rossman added that the unjury trial in the case should be postponed from October to November for this reason. “We are fully aware that the current schedule is no longer working,” he said.
Twitter attorney Bradley Wilson countered that the social media company’s team had been working around the clock to meet the defendant’s demands, which he called “unreasonable.”
“No one is taking a breath on this case,” he said. “Twitter has nothing to hide.”
The scope of the hearing shows how contentious this legal battle has become and marks a further escalation of a dispute that has already taken some dramatic turns. The result could, among other things, grant or block access for both sides to more emails, texts, data and legal rights.
Twitter sued Mr Musk in July over his attempt to walk out of their $44 billion merger agreement struck in April. Mr. Musk later filed a countersuit, accusing the company of misrepresenting the health of its business and key metrics about users on its platform.
On Friday, Chancellor McCormick said she would allow Mr Musk’s lawyers to reconsider her request to force Twitter to collect and review documents from a wider date range. The judge denied Mr Musk’s request in a decision late last month.
In that ruling, she cited, among other things, the additional burden placed on Twitter by its decision to grant it a subset of additional information from Twitter related to spam and fake accounts, after responding to a request from Mr. Musk after several years away from Twitter -Data had called such accounts “absurdly wide”.
The judge also said she would review Mr Musk’s request regarding Twitter’s Slack messages, urging both sides to be prepared to discuss whether Twitter was willing to provide the requested messages to a modified “quick peek.” ‘ to submit an agreement. That would mean that data would be made available to Mr Musk’s lawyers for a limited period of time.
Chancellor McCormick is also hearing arguments related to two pending requests from Twitter: his request for emails from Mr Musk about accounts at his companies Tesla Inc. and Space Exploration Technologies Corp. as well as following texts between Mr Musk and Jared Birchall, the head of Twitter Mr Musk’s family office. Twitter filed a draft order on Friday accusing Mr. Musk of “failing to act in good faith” during the investigative process into the lyrics.
The most weighty request Chancellor McCormick is expected to consider is whether Mr Musk should be allowed to use the allegations made in the whistleblower complaint to substantiate his case. The complaint, filed with the Securities and Exchange Commission in July and published last month, accuses the company of failing to protect sensitive user data and lying about its security problems.
Mr. Musk and his attorneys have said that if the allegations were true, they would show a breach by Twitter of certain terms of their merger agreement. Twitter said the complaint was “riddled with inconsistencies and inaccuracies and lacked important context.”
– Erin Mulvaney contributed to this article.
write to Sarah E. Needleman at [email protected]
Corrections & Enhancements
Delaware Chancery Court Chancellor Kathaleen McCormick on Aug. 25 denied a motion by Elon Musk requesting Twitter documents from a larger date range. A previous version of this article incorrectly stated that she made the decision last week. (Corrected 6 Sep)
Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8