A new week, a new chapter in the novel between Elon Musk and Twitter. When there is only a little more than a month left before the start of the trial that they will star in, the parties continue to throw darts at each other. Last Friday, the tycoon’s legal team sent its third notification letter to the social network insisting on the cancellation of the purchase for 44,000 million dollars. The new reason? The payment of compensation to Peiter Zatko, the company’s former head of security, who allegedly violated the terms of the acquisition.
As on previous occasions, the letter was sent to Vijaya Gadde, Twitter’s legal chief, under the signature of Mike Ringler, one of Elon Musk’s lawyers. The new letter will not change anything in the face of the judicial appointment that will begin on October 17 in the Federal Court of Delaware. However, it is part of the arguments that the environment of the CEO of Tesla and SpaceX intend to establish as a justification for abandoning the plan to take control of the company founded by Jack Dorsey.
On this occasion, the legal team of the tycoon held that Twitter breached the terms of the purchase agreement when he offered unconventional compensation to Zatko after his dismissal earlier this year. In June, the social network agreed to pay him about $7 million in lost compensation. The Wall Street Journal reported that the negotiation was closed after long months of discussion about the amount in question, and just days before the expert made headlines for denouncing the company’s apparent cybersecurity problems.
Agreements of this type are not uncommon in the business world, especially when it comes to the departure of executives. This is because they are usually compensated for the loss of bonuses or stock options. But Elon Musk believes that it is one more reason to leave the agreement and not pay billions of dollars out of his pocket.
He also assured that Twitter never informed him about the compensation nor did he ask for his consent. According to his representatives, he only found out about it when the social network filed a document with the Court in early September.
Elon Musk and Twitter keep throwing darts at each other ahead of trial
This Monday, Twitter came out to respond to the third letter from Elon Musk insisting on the cancellation of the purchase. In an email, the company ensures that the arguments are invalid because the employer continues to violate the agreement “knowingly, intentionally, deliberately and materially.”
Furthermore, the firm led by Parag Agrawal claimed that the purchase was not canceled, but it did not stop there. He also noted that the debt and capital commitment letters – with which Elon Musk guaranteed the financing to face the purchase – are still in force. “Twitter will continue to exercise its right to specifically enforce all of the Musk Parties’ obligations under the Agreement,” he concluded.
As we said before, Elon Musk’s new letter does not change the landscape ahead of the start of the trial. Anyway, yeah make it clear how the argument established by their lawyers has evolved. Let’s not forget that the first attempt to cancel the purchase was based on the controversy of counting bots and spam accounts. While the second was for the accusations of “negligence and recklessness” in cybersecurity by Peiter Zatko.
Twitter, meanwhile, assured that the businessman’s real motives had nothing to do with his public arguments. He said that Elon Musk chickened out, especially because of the global political context and the effect of inflation on the markets. In a recent hearing, a lawyer for the social network read an SMS that the tycoon sent to a Morgan Stanley banker. In it, he requested that the entity “cool down” its involvement in the purchase process. “There’s no point in buying Twitter if we’re heading into World War III”plot.
Last week, Judge Kathaleen McCormick approved Musk’s legal team to use Peiter Zatko’s claims against Twitter in his case. However, she gave him a thumbs down at her request to delay the trial until November.