Legal experts said that Twitter is seeking to prove that Elon Musk tried to abandon funding for his $44 billion acquisition of the social media company while also investigating his motives for backing out of the deal.
Twitter sent dozens of civil subpoenas this week to global banks and investors involved in the deal, according to filings with the Delaware Court of Justice over the past two days.
The subpoenas seek access to documents and communications related to the deal, its financing and any information about fake Twitter accounts. It is also seeking information about the possible impact on the deal from changes in the share price of electric car maker Tesla, of which Musk is CEO.
The subpoenas are part of Twitter’s lawsuit against Musk, seeking to get him to keep the deal at an agreed-upon price of $54.20 per share.
A five-day trial is scheduled to begin on October 17 in the Delaware Court of Justice.
Experts say the subpoenas indicate that Twitter is seeking to find out what lenders, investors, and advisors were telling each other about Musk’s behaviour after he sealed the deal in late April.
“They suspect that Musk is plotting behind the scenes to get the whole thing down,” said Minor Myers, a professor at the University of Connecticut School of Law.
Musk had said on July 8 that he would back out of the deal because Twitter violated the agreement by withholding data from fake accounts on the platform.
Twitter said the fake accounts were a distraction from the only important issue, the terms of the agreement. While Musk also said he would abandon the deal because Twitter had fired two high-ranking executives along with a third of its talent acquisition team, a backsliding from the company’s commitment to “keep the hardware of the existing ecosystem largely intact.”
Legal experts say that Musk cannot be asked to close the deal if the financing fails – provided he is not the reason for it.