Elon Musk’s $44 billion takeover bid for Twitter Inc. (TWTR.N) is being investigated by Twitter Inc. (TWTR.N), according to legal experts, who are also trying to determine why he backed out of the transaction.
As per the documents filed over the last two days in the Delaware Court of Chancery, Twitter served dozens of civil subpoenas this week on international banks like subsidiaries of Morgan Stanley (MS.N), co-investors in the deal like an associate of Brookfield Asset Management Inc (Bama.TO), as well as Musk advisers.
Morgan Stanley chose not to respond. An inquiry for its statement was not immediately accepted by Brookfield. No one could be reached to speak with Musk or Twitter representatives.
The subpoenas search for emails and records pertaining to the acquisition, its funding, and any details on Twitter bots or phony accounts. Additionally, they prod the receivers if they are aware of any potential effects that changes in the share price of Tesla Inc. (TSLA.O), the parent company of Musk’s electric vehicle company, may have on the agreement.
The subpoenas are a part of Twitter’s legal action against Musk, which aims to compel him to honour the contract at the $54.20 per stock price he had previously committed to. The Delaware Chancery Court will open a five-day trial on October 17.
Experts say that the subpoenas show Twitter desires to know what creditors, investors, and advisers were talking to one another about Musk’s actions after he reached an agreement in late April.
They believe that he has been planning to blow everything up behind the scenes, according to Minor Myers, a lecturer at the UConn School of Law.
Musk announced on July 8 that he was pulling out of the arrangement because Twitter allegedly broke the terms by failing to share information about phony accounts on the network. According to Twitter, the phony accounts serve as a diversion from the agreement’s conditions, which are the only thing that really matters.
Additionally, Musk had stated that he was leaving because Twitter failed to uphold its responsibility to maintain significantly intact the minimum configuration of its current business organisation by firing greater administrators and one-third of the talent recruitment 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 operational partner at the venture capital company 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.
According to Boston College Law School’s Brian Quinn, Twitter users want to know whether Gracias played any part in securing money or whether his sole purpose was to delay proceedings.
Andreessen 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.
Experts comment that 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 retired Tesla top executive and current head 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.
Meanwhile, as per Delaware business litigator Theodore Kittila, Twitter is attempting to ascertain what Musk was discussing in private while publicly tweeting his worry about Twitter bots and false accounts.
Over the past two days, Musk has sent his own subpoenas to the content moderator TaskUs USA (TASK.O) and the data analytics company Concentrix Solutions Corp (CNXC.O). The subpoena questions for Musk were submitted under seal.