Judge Delays Musk/Twitter Lawsuit, Gives Them Three Weeks to Complete Merger [Updated]

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Updated 7:30 p.m. ET: Delaware Court of Chancery Judge Kathaleen McCormick granted Elon Musk's request for a stay in an order that gives the parties three weeks to negotiate and conclude fusion. The trial will not begin on October 17 as scheduled and would be canceled entirely if the merger closes by the end of this month. If the talks fail, a trial would be scheduled for November.

"This action is suspended until 5:00 p.m. on October 28, 2022, to allow the parties to complete the transaction. If the transaction does not close before 5:00 p.m. on October 28, 2022, the parties are invited to contact me by e- mail that evening to obtain dates for the November 2022 trial," McCormick wrote.

Musk's request for a reprieve indicates the merger is on track to close by October 28. Twitter did not want the litigation to be suspended. "Plaintiff Twitter opposes the motion on the basis that defendants' agreement will not ensure the transaction closes quickly enough," McCormick wrote.

Original story: Elon Musk today slammed Twitter for not immediately dropping the case against him and asked the judge to stay the case because "Twitter won't take yes for an answer."

With Musk having told Twitter this week that he was once again willing to honor his original deal, the company is unsurprisingly looking to make sure Musk won't breach the merger contract again before agreeing to suspend the litigation. Musk - who previously tried to delay the trial until 2023 - accused Twitter of not acting quickly enough in a case filed by his attorneys today:

Twitter will not accept yes for an answer. Surprisingly, they insisted on pursuing this litigation, recklessly putting the deal at risk and playing with the interests of their shareholders. Pursuing a lawsuit is not only a huge waste of court and judicial resources, it will compromise the parties' ability to close the deal.

The filing asks Judge Kathaleen McCormick of the Delaware Court of Chancery "to stay this action and remove the October 17 trial from the Court's calendar due to the changed circumstances that effectively prompted this action. ". Musk's filing also indicates that the merger is set to close on or around October 28.

While a stay would not close the trial, Twitter is unlikely to wish to cancel the scheduled trial date until it is certain that the merger will be finalized.

Debt financing would be a sticking point in the negotiations. Musk's letter to Twitter earlier this week said his offer to honor the original deal was pending receipt of debt funding.

Musk has committed up to $33.5 billion himself. His filing indicates that there will be no problem financing the remainder of the $44 billion purchase price:

Quite to the contrary, counsel for the debt financing parties have indicated that each of their clients is prepared to honor their obligations under the Bank Debt Commitment Letter on the terms and subject to the satisfaction of the conditions. which are set out therein. So we advised Twitter, again to no avail. Not only have Twitter's baseless speculations been refuted by the banks themselves, but any theoretical claims that Twitter might concoct based on a possible funding failure that didn't happen are unripe and unripe. founded, which makes them well outside the scope of the trial which is due to begin in eleven days.

Musk further asserted that continuing the litigation "would send a signal to the market that, despite the defendants' commitment to fulfill their obligations under the merger agreement and the commitment letter on equity, Twitter is asking the court to stop the deal from moving forward, instead of allowing the parties to focus on securing the debt financing needed to complete the deal and prepare...