Twitter-Musk trial still on track, for now - judge

Oct. 05, 2022 2:27 PM ETTwitter, Inc. (TWTR)TSLABy: Jason Aycock, SA News Editor25 Comments

Elon Musk To Buy Twitter

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The end to the months-long buyout drama between Twitter (NYSE:TWTR) and Elon Musk was put on hold, Wednesday, as a judge in Delaware said the Oct. 17 trial over the future of the $44B deal was still on track.

Twitter (TWTR) and Elon Musk are still on a courtroom collision course to settle the fate of their $44B buyout after Chancellor Kathaleen McCormick said she would "continue to press on" toward the trial in less than two weeks as the parties involved hold talks on the matter.

The battle between Musk and Twitter (TWTR) seemed to take a step toward resolution when, on Tuesday, Musk's lawyers sent a letter to Twitter (TWTR) proposing the deal be completed under its original terms, which valued the company at $54.20 a share. Musk and Twitter (TWTR) originally reached a buyout deal in April, but the Tesla (TSLA) chief executive soon said he was backing out of the acquisition, and Twitter (TWTR) sued to get him to adhere to the deal's terms.

However, despite Musk's Tuesday offer, which was also filed with the U.S. Securities and Exchange Commission, McCormick said that, as of now, the trial will still be held on October 17 because "The parties have not filed a stipulation to stay this action, nor has any party moved for a stay."

That opening came on a ruling on the matter of sanctions sought by Twitter (TWTR) over the Musk team's production of texts and instant messages, sent by and from Musk.

Some of the issues there have been rendered moot by ongoing developments in the case, McCormick notes.

But one issue raised by Twitter struck a chord: The company sought production of 19 texts exchanged between Musk and his attorney, Alex Spiro, but only three of those were called privileged by the defense. "For the avoidance of doubt," Musk's team is ordered to "produce or log any of these messages that are responsive" to Twitter's request.

And when it came to messages sent other than by text, and particularly Musk's use of private-message service Signal, "To the extent that Defendants [Musk et al.] have not done so already, Defendants are ordered to collect and produce responsive iMessages and non-SMS instant messages in Musk’s files from May 24 through May 30 and June 1 through June 7," along with any other messages needed to put those messages in context.

Musk's custodians permitted the auto-deletion of certain Signal communications "and that those communications are irretrievably lost," McCormick says, though the time frame of the deletions is unclear, as is the appropriate remedy. So she is reserving a decision on sanctions for the post-trial record.

Twitter stock (TWTR), which surged more than 22% on Tuesday in response to Musk's offer to go forward with the deal, slipped by almost 1% late in Wednesday's trading session.

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