The filing in Delaware’s Chancery Court assailed claims that Musk’s acquisition should be delayed until 2025 based on agreements with other major Twitter investors—including founder Jack Dorsey—that made him an “interested shareholder” under the state’s corporate laws, which require most such deals to wait three years.
Musk, Dorsey, Twitter CEO Parag Agrawal, and other board members asked the court’s top judge, Chancellor Kathaleen St. Jude McCormick, to dismiss the suit by the Orlando Police Pension Fund. The fund’s attempt use an anti-takeover statute against a deal negotiated at arm’s length, in broad daylight, would stretch the law “beyond its limits and intent,” they said.
The motion came days after Musk sowed doubts about the deal by threatening to put it on hold unless Twitter provides him with more information about the number of spam accounts on the platform. Musk has sold billions worth of stock in
Musk—a prolific tweeter with 94 million followers—has reportedly made advertisers nervous by pledging to turn the network into a safe space for absolute free speech. He frequently uses the platform to blast perceived censorship by Twitter and other social media companies.
In their motion Wednesday, Musk, Twitter, and its board said the pension fund suit overstates or misinterprets his relationships with other Twitter investors, such as Dorsey and Saudi Arabia’s Prince Al Waleed bin Talal Al Saud. It makes no sense to claim Musk reached an agreement with the Saudi billionaire, who initially opposed the deal, according to the filing.
Although bin Talal has now pledged to support the transaction, there are no plausible allegations that he had any agreement with Musk beforehand, which is the kind of “agreement, arrangement or understanding” contemplated by Delaware corporate laws, the motion said.
The same goes for Musk’s alleged arrangement with
The bank “expressly establishes information barriers between its entities to avoid conflicts of interest like the one plaintiff implicitly alleges here,” the motion said.
Musk is represented by Skadden, Arps, Slate, Meagher & Flom LLP and Quinn Emanuel Urquhart & Sullivan LLP. Twitter is represented by Morris, Nichols, Arsht & Tunnell LLP and Shearman & Sterling LLP.
The board is represented by Richards, Layton & Finger PA; Simpson Thacher & Bartlett LLP; and Potter Anderson & Corroon LLP.
The pension fund is represented by Saxena White PA and Friedman Oster & Tejtel PLLC.
The case is Orlando Police Pension Fund v. Twitter Inc., Del. Ch., No. 2022-0396, motion to dismiss filed 5/18/22.