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Twitter Inc TWTR.N will get an October trial in its legal fight to hold Elon Musk to his $44 billion takeover, after a Delaware judge said the social media company deserved a quick resolution of the dealโs uncertainty.
The ruling is a blow to Musk, who pushed for a trial in February to allow for an extensive investigation into his claims that Twitter has misrepresented the number of fake or spam accounts.
The question of whether Twitterโs user numbers are inflated is core to his contention that he can walk away from the deal. The company, which had requested a September trial, says the issue is a distraction and deal terms require Musk to pay up.
Twitter had argued that delaying the trial into the next year could threaten deal financing.
Chancellor Kathaleen McCormick of the Court of Chancery in Delaware said on Tuesday that the company deserved a swift decision on its claims.
โThe reality is delay threatens irreparable harm to the sellers,โ she said, referring to Twitter.
McCormick asked the parties to work out the schedule for the trial, which she said would last five days.
Twitter shares were up 3.4% at $39.71 on Tuesday afternoon.
An attorney for Musk, who is also the chief executive of electric car maker Tesla Inc TSLA.O, did not respond to a request for comment.
โWe are pleased that the court agreed to expedite this trial,โ a Twitter spokesperson said.
Twitter wants McCormick to order Musk to complete the deal at the agreed price of $54.20 per share. It said it needed the earliest possible trial date in case Musk was ordered to close and additional litigation was then needed to address financing, which expires in April.
Twitterโs lawyer William Savitt argued during the hearing that Musk seized on the issue of bot and spam accounts because he was seeking to โconjure an exit ramp for a deal that doesnโt have one.โ
Muskโs attorney pushed back on the notion that Musk was trying to harm Twitter, pointing out the billionaire held a larger stake than the combined holdings of the directors of Twitter.
Musk had argued an expedited trial would allow Twitter to hide the truth about spam accounts, which Musk began questioning after signing the deal for Twitter in late April.
โWhen Mr. Musk started asking questions, the answers he got were alarming,โ said Andrew Rossman, Muskโs lawyer. He said it will take months to analyze massive amounts of data to resolve Muskโs questions about Twitterโs spam accounts.
Musk is already facing a separate five-day trial before McCormick, starting on Oct. 24, over his record $56 billion pay package from Tesla.
REUTERS
