An elaborate joke: How Twitter's suit before Delaware court described Elon Musk's takeover bid and pull out

Twitter has moved a US court seeking a direction to billionaire business magnate Elon Musk to perform his obligations under the agreement to buy the social media giant..In a suit filed before the Court of Chancery at Delaware, Twitter has alleged that Musk put up a "public spectacle" to "trash the company, disrupt its operations, destroy stockholder value, and walk away" after having signed a merger agreement to take over the company in April this year..As per the suit, Musk, who owns approximately 9.6% of Twitter’s stock, had initially offered to join the Board of Twitter, but later made an offer to buy the entire company in a take-it-or-leave-it offer. On April 25, he agreed to buy Twitter for $54.20 per share in cash, for a total of about $44 billion.However, after the merger agreement was signed, the market fell, resulting in the decline of Musk’s stake in Tesla, the company he owns, by more than $100 billion."Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders. This is in keeping with the tactics Musk has deployed against Twitter and its stockholders since earlier this year, when he started amassing an undisclosed stake in the company and continued to grow his position without required notification," the suit reads..Since the downturn, Musk repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its share price, the company has claimed.Eventually, on July 8, Musk gave Twitter notice to terminate the merger agreement on the following grounds:(i) purported breach of information-sharing and cooperation covenants; (ii) supposed “materially inaccurate representations” in the merger agreement that allegedly are “reasonably likely to result in” a Company Material Adverse Effect; and (iii) purported failure to comply with the ordinary course covenant by terminating certain employees, slowing hiring, and failing to retain key personnel..However, Twitter denied the existence of any of these conditions, stating as a counterblast:"He has purported to put the deal on “hold” pending satisfaction of imaginary conditions, breached his financing efforts obligations in the process, violated his obligations to treat requests for consent reasonably and to provide information about financing status, violated his non-disparagement obligation, misused confidential information, and otherwise failed to employ required efforts to consummate the acquisition.".The spam account controversy.As Musk has made clear publicly, the main reason why he pulled out of the Twitter deal was because the company did not provide him adequate information with regard to spam accounts on the social media platform.However, the company claims that it had shared all the relevant information, even though it was not required to under the merger agreement."Spam was one of the main reasons Musk cited, publicly and privately, for wanting to buy the company...Yet Musk made his offer without seeking any representation from Twitter regarding its estimates of spam or false accounts," the suit states..It had estimated that the average of false or spam accounts on its platform was fewer than 5% of its monetizable daily active users (mDAUs) during the quarter. This number, by Twitter's own admission before the US Securities and Exchange Commission (SEC), is not based on any standardized industry methodology, and may not accurately reflect the actual number of people or organizations using the platform.As the market declined, Musk’s advisors began to demand detailed information about Twitter’s methods of calculating mDAU and estimating the prevalence of false or spam accounts. After a diligence meeting held on May 13, Musk tweeted a misrepresentation that Twitter’s sample size for spam estimates was just 100. This, the company claims, violated his obligations under the merger agreement..On Musk's requests, the company provided him with data sets and written descriptions of its audience and its process for sampling the prevalence of false or spam accounts. Even so, his lawyers asserted that Twitter had “failed to respond to any” of his information requests and insisted that they be granted access to the firehose data (live-feed of data on activity of users) so Musk could “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform.”On June 15, Twitter gave Musk secure access to the firehose data, even though the merger agreement did not require the sharing of this information. However, Twitter claims that Musk then shifted the goal posts and demanded other data in response. Even so, the company says that it provided all the relevant information to Musk, who then levelled serious charges, both publicly and through lawyer letters, that Twitter had misled its investors and customers. In this context, the suit states,"From the outset, defendants’ information requests were designed to try to tank the deal. Musk’s increasingly outlandish requests reflect not a genuine examination of Twitter’s processes but a litigation-driven campaign to try to create a record of non-cooperation on Twitter’s part. When Twitter nonetheless bent over backwards to address the increasingly burdensome requests, Musk resorted to false assertions that it had not.".For Musk, it would seem, Twitter, the interests of its stockholders, the transaction Musk agreed to, and the court process to enforce it all constitute an elaborate joke.Twitter suit in Delaware court.Before the Court, Twitter claimed that it has suffered and will continue to suffer irreparable harm as a result of Musk's breaches. It thus sought the following relief:A. Granting all relief requested in this complaint to the extent permitted under the merger agreement; B. Ordering defendants to specifically perform their obligations under the merger agreement and consummate the closing in accordance with the terms of the merger agreement; andC. Granting such injunctive relief as is necessary to enforce the decree of specific performance..Twitter is represented by teams of lawyers from Potter Anderson & Corroon LLP, Wachtell, Lipton, Rosen & Katz and Wilson Sonsini Goodrich & Rosati.