Twitter sues Musk over deal retreat

WILMINGTON, North Carolina－Twitter sued Tesla CEO Elon Musk on Tuesday to force him to complete the $44 billion acquisition of the social media company.

Musk and Twitter have been bracing for a legal fight since the billionaire said on Friday that he was backing away from his April agreement to buy the company.

Twitter's lawsuit opened with a sharply worded accusation. "Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests," the lawsuit read.

"Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he－unlike every other party subject to Delaware contract law－is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away."

Twitter filed its lawsuit in the Delaware Court of Chancery, which frequently handles business disputes among many corporations that are incorporated there, including Twitter. Musk did not immediately respond to a request for comment, but said on Twitter: "Oh the irony lol."

$1b breakup fee

As part of the April deal, Musk and Twitter had agreed to pay each other a $1 billion breakup fee if either was responsible for the deal falling through. The company could have pushed Musk to pay the hefty fee but is going farther than that, trying to force him to complete the full $44 billion purchase approved by the company's board.

Musk alleged on Friday that Twitter has failed to provide enough information about the number of fake accounts on its service.

The company has said for years in regulatory filings that it believes about 5 percent of the accounts on the platform are fake. Musk is also alleging that Twitter broke the acquisition agreement when it fired two top managers and laid off a third of its talent acquisition team.

The lawsuit accused Musk of a "long list" of violations of the merger agreement that "have cast a pall over Twitter and its business". It said for the first time that employee attrition has been "on the upswing" since the deal was announced.

Twitter also accused Musk of "secretly" accumulating shares in the company between January and March without properly disclosing his substantial purchases to regulators.

Agencies via Xinhua