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Musk Sued by Twitter Investor Over Busted $44 Billion Deal (1)

Aug. 1, 2022, 2:40 PM

A Twitter Inc. shareholder hit Elon Musk with a proposed class action, effectively joining the tech giant’s bid to block the world’s richest man from backing out of his pledge to pay $44 billion to acquire the influential social networking platform.

The lawsuit was filed in Delaware Chancery Court—the same forum that’s set to hold a fast-tracked trial in October of Twitter’s claims against Musk—by an investor who holds 5,500 Twitter shares. In addition to Musk, it names as defendants two “corporate acquisition entities” related to the deal.

The suit, docketed July 29, targets Musk’s “lame rationales for reneging on his contract,” accusing the billionaire of fabricating excuses to get out of the buyout. Like Twitter’s earlier suit, it seeks a court order compelling Musk to consummate the transaction.

Musk formally answered Twitter’s suit July 29 in a court filing that remains under seal.

Tesla Inc., the electric vehicle maker run by Musk, didn’t immediately respond Monday to a request for comment on his behalf. Tesla isn’t named as a defendant.

Investor Luigi Crispo’s allegations echo Twitter’s claim that Musk is exploiting phony concerns about spam and “bot” accounts as a bogus pretext for backing out of the deal without a valid legal basis.

Musk, meanwhile, says Twitter has breached its obligation to be truthful in deal-related disclosures by stating without proof that bots account for about 5% of its daily users.

Cause of Action: Breach of contract; breach of fiduciary duty.

Relief: Specific performance, damages, costs, fees, and interest.

Attorneys: The investor is represented by Prickett, Jones & Elliott PA and Scott & Scott Attorneys at Law LLP.

The case is Crispo v. Musk, Del. Ch., No. 2022-0666, 7/29/22.

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

(Updates with additional lawsuit details.)

© 2022 Bloomberg L.P. All rights reserved. Used with permission.