Elon Musk may include new evidence from a Twitter whistleblower as he fights his way out of his $44 billion deal to buy the social media company, but Musk won’t be able to delay a high-stakes lawsuit in October on the dispute, a judge ruled on Wednesday.
Chancellor Kathaleen St. Jude McCormick, Chief Justice of the Delaware Court of Chancery, denied Musk’s request to delay the trial for four weeks. But it did allow Tesla’s billionaire CEO to add evidence related to whistleblower claims by former Twitter security chief Peiter Zatko, who is due to testify in Congress next week about poor cybersecurity practices. of the company.
Twitter sued Musk, asking the Delaware court to force him to complete the deal he made in April to buy the company. Musk fought back and a trial is set to begin the week of October 17.
Musk’s legal team argued that the allegations made by Zatko to US officials could help bolster Musk’s claims that Twitter misled him and the public about the company’s issue with the Internet. fake accounts and “spam”. Zatko, a well-known cybersecurity expert known by his hacker name “Mudge”, said he was fired in January after exposing Twitter’s negligence in protecting the security and privacy of its users.
The judge’s ruling follows an hour-long hearing on Tuesday in which lawyers for Musk and Twitter argued over the merits of Zatko’s allegations and the pace at which the two sides produce evidence before the court. court case.
Twitter lawyers have sought to downplay the relevance of Zatko’s allegations in the merger dispute, arguing that an initial 27-page complaint he sent to Twitter and a subsequent retaliation claim made no mention of the issues of “spam bot” that Musk gave as a reason to end the deal. Zatko “never said a word about spam or bots” until his whistleblower complaint in July, Twitter attorney William Savitt said.
Twitter argued for weeks that Musk’s reasons for pulling out were merely a cover for buyer’s remorse after he agreed to pay 38% above Twitter’s share price shortly time before the stock market stumbled and shares of electric car maker Tesla, where most of Musk’s personal stock wealth resides, lost more than $100 billion in value.
McCormick, the judge, said Wednesday that the newly released whistleblower complaint gave Musk’s team grounds to amend its countersuit, but she declined to comment on specifics.
“I am reluctant to say more about the merits of the counterclaims in this position until they have been fully argued,” she wrote. “The world will have to wait for the decision after the trial.”
McCormick, however, sided with Twitter’s concerns that delaying the lawsuit would make it harder for the company to get back to business.
“I am confident that even a four week delay would risk further harm to Twitter, too great to be justified,” she wrote.
In afternoon trading, Twitter shares added 5.5% to $40.77.