A judge ruled that Twitter's lawsuit against Tesla CEO Elon Musk over their $44 billion acquisition agreement should begin in October, on Tuesday, July 19.
Court Approved Expedited Trial
According to The Wall Street Journal, the decision came after the first hearing in the case over whether to expedite the proceedings.
When Twitter filed the lawsuit days after Musk terminated the deal, the social media company filed a motion to expedite the proceedings and requested a four-day trial in September. However, Musk's legal team opposed the court's motion.
The hearing featured arguments between Twitter and Musk, including the company's lawyer at one point referring to Musk as an "enemy." It has set the stage for what is going to be a long and continuous legal battle, according to AP News.
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Twitter and Musk's Hearing
At the start of the hearing, Twitter's lead counsel William Savitt argued in favor of a speedy trial. Savitt said that the uncertainty hanging over the company from the outstanding deal and litigation "inflicts harm" on Twitter "every hour and every day."
Savitt also pointed out Musk's disparagement of Twitter and said that the Tesla CEO remains contractually obligated to close the deal, and backing out from the agreement is "sabotage."
Musk's lawyer Andrew Rossman defended the CEO and said he does not have an incentive to keep the deal "hanging for a long time." He also noted that the billionaire remains one of Twitter's largest shareholders.
Rossman also noted that Twitter did not sue Musk over his alleged breaches of the deal until after he moved to terminate the deal, suggesting that the social media company's wait invalidated its desire for the expedition, according to CNN.
Musk's legal team proposed that the dispute should go to trial in 2023, as they want a "rapid and sensible schedule."
Musk Loses Schedule Request
Following the argument from each side, the judge overseeing the dispute, Delaware Court of Chancery chancellor Kathaleen St. Jude McCormick, said that Musk's side "underestimate the ability of the court to quickly process litigation."
Judge McCormick added that the delay would harm Twitter, and the longer the delay, the greater the risk. She also announced the scheduling plan, with the two parties meeting again in October.
While the case warrants a trial longer than five days, Judge McCormick said she would entertain a request from either side to extend the trial if needed.
Even with the scheduling dispute, the stakes were high for Twitter as it was already struggling to grow its user-based and advertising business before Musk's became involved. The company and other tech giants are now pulling back on costs amid inflation and fears of recession.
Twitter needs a fast resolution to the battle with Musk in order to limit the uncertainty for its shareholders, employees, and customers, and any fallout for its business could be costing the company.
Even though the recent hearing was procedural, it offered a look at how each side may approach the litigation process. It also provided a glimpse of how the judge overseeing the case is approaching the dispute.
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Written by Sophie Webster
