Twitter has filed a lawsuit against Elon Musk, claiming that the world's richest man broke the terms of his $44 billion deal to acquire the social networking site.
According to a court document, Twitter filed the lawsuit on Tuesday, July 12 in Delaware chancery court to ask for a decision compelling Musk to complete the merger at the agreed-upon price of $54.20 per Twitter share.
Because the agreement he signed no longer serves his personal interests, Musk refuses to uphold his commitments to Twitter and its shareholders, according to the lawsuit.
Musk announced the end of the partnership last Friday, claiming that Twitter had broken the terms by refusing to provide information about phoney or spam accounts on the network, which is crucial to the platform's ability to conduct business.
On Tuesday night, the billionaire appeared to address the lawsuit in a tweet, writing: "Oh the irony lol."
Twitter's lawsuit states that Musk 'apparently believes that he - unlike every other party subject to Delaware contract law - is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.' Musk mounted a public spectacle to put Twitter in play and proposed and then signed a seller-friendly merger agreement, according to Twitter.
On Tuesday afternoon, General Counsel Sean Edgett of Twitter sent out a note to the whole company informing everyone about the complaint.
According to the New York Times, Edgett stated in the memo that it was "critically important" for the case to be resolved quickly. "We have also filed a motion for an expedited trial alongside the complaint, asking for the case to be heard in September," he added.
We currently anticipate that the court will set a schedule for the case as the next step in the procedure,' he continued.
The lawsuit was a much-anticipated action after Musk revealed last week that he intended to renege on the April 25 merger agreement, which included consequences for doing so.
These penalties included the option for the parties to enforce the contract in court, which Twitter administrators had previously promised to do, as well as a $1 billion breakup fee.
Musk claims that by withholding crucial information on phoney accounts on the network, Twitter has violated its contractual commitments.
Since both Twitter and the business Musk is employing to effectuate the merger are legally incorporated in Delaware, the case filed by Twitter will be heard there.
The complaint claimed that Musk has broken "a long number" of merger agreement provisions that "have put a shadow on Twitter and its business."
On Tuesday, shares of the social media company closed at $34.06, a significant decline from the levels around $50 where they were trading when the purchase was approved by the board of directors of Twitter in late April.
Due to incomplete information about spam accounts and false statements, which Musk said constituted a "material adverse event," he announced that he was cancelling the transaction.
He added that executive departures amounted to a breach of Twitter's obligation to operate business as usual.
Twitter said that it negotiated to have language that would have considered such firings to be outside of the ordinary course of business removed from the merger agreement.
Twitter referred to Musk's justifications as a "pretext" that lacked substance and claimed his choice to go had more to do with the market's collapse, particularly for tech companies.
Musk has kept up his barrage of criticisms against Twitter by tweeting a number of memes that make fun of the firm's efforts to uphold the agreement.