Twitter has hired a prestigious merger law firm to represent it in its lawsuit against Tesla CEO Elon Musk for withdrawing his $44 billion bid to acquire the company, Bloomberg reported on Sunday, citing undisclosed sources.
The company has reportedly retained Wachtell, Lipton, Rosen & Katz LLP to represent it in a pending lawsuit. In return, the Tesla CEO's legal team reportedly said that the social media platform appears "to have made false and misleading representations" when Musk agreed to buy the business on April 25, and had "breached" numerous terms of the original deal.
The social media business reportedly plans to launch a lawsuit at the beginning of this week. By employing Wachtell and company, Twitter receives access to attorneys like Bill Savitt and Leo Strine, who served as chancellor of the Delaware Chancery Court, where the matter would be heard. Quinn Emanuel Urquhart & Sullivan LLP has been hired by Musk.
Musk's ongoing legal representation in a shareholder lawsuit over his unsuccessful attempt to take Tesla Inc. private in 2018 is being handled by the same firm that successfully led his defense against a defamation claim in 2019.
More than half of US public companies, including Twitter, and more than 60% of Fortune 500 companies have their corporate headquarters in Delaware, according to Bloomberg. Chancery judges, who are knowledgeable in corporate law, hear cases there without juries and are not permitted to grant punitive damages.
According to the report, attempts to cancel a deal might take place within a few months, involving settlements to avoid additional wrangling.
Earlier, Musk threatened to walk away from the purchase if the company could not demonstrate that fewer than 5% of its daily active users were automated spam accounts. Musk's staff has expressed concerns about "spam bots" on the site. According to reports at the time, Twitter reportedly gave Musk access to its "firehose" of raw data on hundreds of millions of daily tweets, though neither the business nor Musk verified this.
During a call with executives on Thursday to discuss the company's bogus and bot accounts, Twitter reportedly stated it removes 1 million spam accounts daily.
Twitter reportedly said at the time that spam accounts make for significantly less than 5% of its active user base each quarter. IP addresses, phone numbers, and location are examples of private data that is not accessible to the general public and is not included in the data "firehose" provided to Musk. According to Twitter, this sensitive information helps prevent falsely labeling actual accounts as spam.