whatsappicon

Banks are being enquired by Twitter to look for leads on Musk financing the deal

Owner's Profile

Staff Writer, TLR

Published on July 14, 2023, 17:41:00

Banks, twitter, musk financial, UAE, Dubai, law firm, Legal, Morgan Stanley

Elon Musk's $44 billion takeover bid for Twitter Inc. is being investigated by Twitter Inc., according to legal experts, who are also trying to unearth evidence that Musk sought to thwart the financing of the acquisition.

According to documents filed over the past two days in the Delaware Court of Chancery, Twitter served dozens of civil subpoenas this week on international banks including affiliates of Morgan Stanley, co-investors in the deal like an affiliate of Brookfield Asset Management Inc., and Musk advisers.

Morgan Stanley chose not to respond. An inquiry for comment was not immediately answered by Brookfield. No one could be reached to speak with Musk or Twitter representatives.

The subpoenas ask for emails and records related to the transaction, it's funding, and any details on "bot," or false, Twitter accounts. Additionally, they ask the receivers if they have any knowledge of how fluctuations in the stock price of Musk's electric vehicle manufacturer Tesla Inc. could affect the deal.

 The subpoenas are a component of Twitter's lawsuit against Musk, which aims to compel him to honour the agreement at the $54.20 per share price. On October 17, a five-day trial is set to start in the Delaware Chancery Court.

 According to experts, the subpoenas show Twitter is interested in learning what lenders, investors, and advisers were saying about Musk's actions after he signed the contract in late April. "They suspect that behind the scenes he's been conspiring to blow the whole thing up," said Minor Myers, a professor at UConn School of Law.

 On July 8, Musk announced that he was pulling out of the arrangement because Twitter was purportedly in violation of the agreement by withholding information regarding phoney accounts on the platform. According to Twitter, the phoney accounts serve as a diversion from the agreement's conditions, which are the only thing that matters. Additionally, Musk had stated that he was leaving because of Twitter's failure to "preserve substantially intact the material components of its current business organisation" by firing high-ranking executives and one-third of the talent acquisition team. Legal experts argue that Musk cannot be forced to complete the transaction if financing fails, providing he is not the reason for the unsuccessful finance.

The subpoenas issued by Twitter centred on Musk's purported termination of Bob Swan, an operating partner at the venture capital firm Andreessen Horowitz who had initially spearheaded Musk's efforts to secure the transaction financing. Twitter's lawsuit claims that Antonio Gracias, a longtime associate of Elon Musk, took his place.

Brian Quinn, a professor at Boston College Law School, said Twitter seems to want to know if "Gracias had any role in getting financing done or if he was just supposed to slow things down."

Andreeesen Horowitz and LinkedIn communications to Swan did not receive a prompt response. An inquiry for comment made to Gracias' company, Valor Equity Partners, received no response.

According to experts, Twitter would be curious to learn about lenders' worries about the prevalence of bogus accounts on the network and whether or not this was a problem for them as Musk has stated.

Investors were asked to provide contacts between close friends of Musk, like Steve Jurvetson, a former Tesla board member and current director of SpaceX, the privately owned rocket firm that Musk founded and currently heads, and those regarding the Twitter acquisition. An inquiry for comment made to Jurvetson's Future Ventures company did not receive an immediate response

"lol, lawyers w/ TWTR are sending subpoenas to friends in the ecosystem around @elonmusk," wrote Joe Lonsdale, a co-founder of Palantir Technologies Inc, on Twitter. "I have nothing to do with this aside from a few snarky comments, but got a 'YOU ARE HEREBY COMMANDED' document notice," he wrote. He called Twitter's subpoenas a "giant harassing fishing expedition." A message seeking a response was sent to Lonsdale's 8VC company, but he did not react right away.

According to Delaware business litigator Theodore Kittila, Twitter is attempting to ascertain what Musk was saying in private while publicly tweeting his worry about Twitter bots and false accounts.

"They are trying to climb in there, behind the tweets," said Kittila. "They are looking at emails and trying to divine the conversation that occurred and what drove his decision to suspend the deal."

Over the past two days, Musk has sent his subpoenas to the content moderator TaskUs USA and the data analytics company Concentrix Solutions Corp. The subpoena for Musk were submitted under seal.

For any enquiries or information, contact info@thelawreporters.com or call us on +971 52 644 3004 

Comments

    whatsappicon