Musk’s Twitter Summons Storm Got Everyone Wet

WASHINGTON, Aug. 19 (Reuters Breakingviews) – Elon Musk and Twitter (TWTR.N) have been trying to do each other’s dirty laundry after going after brilliant technology players and white shoe law firms. Lawyers for the Tesla (TSLA.O) boss have issued a variety of subpoenas as part of a legal battle over the social network’s $44 billion purchase. Salesforce (CRM.N), which considered buying Twitter in 2016, is the latest to be dragged into the controversy. This is strange because Twitter President Brett Taylor is the co-CEO of the software company. The parties have more incentive to compromise.

The increasingly acrimonious legal battle is bad for both the buyer and seller. Twitter sued Musk in July to uphold the deal after he said he was withdrawing due to alleged breaches of the merger agreement. Since then, they have been flooded with requests for documents and deposits as they prepare for an October trial, a major distraction for both Musk and Twitter chief executive Parag Agarwal.

The wide web of legal requests raises the potential for embarrassment. Advertising technology companies Integral Ad Science (IAS.O) and DoubleVerify (DV.N) were summoned Thursday, according to filings filed in a Delaware court. Musk wants communication around reviews of Twitter accounts so users can be verified; Fake accounts are a major controversy in the deal. He also served Twitter’s law firm, Wachtel, Lipton, Rosen & Katz, an unusual move in an M&A lawsuit.

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Twitter is also doing its job. It sent summons to people who planned to co-invest with Musk on Twitter, including Oracle (ORCL.N) founder Larry Ellison and venture capitalist Marc Andreessen. It also seeks information from banks offering financing for the Twitter deal, including Tesla and Morgan Stanley (MS.N). Even people whose involvement is unclear, such as Citadel founder Ken Griffin, have been named. He is listed as a potential co-investor of Musk.

Past deal fights show just how revealing they can be. Take the fight over the board seats of Aerojet Rocketdyne (AJRD.N) and junk sales to Lockheed Martin (LMT.N). The company’s chief executive, Eileen Drake, told a Delaware judge in May that President Warren Lichtenstein offered to buy her an Hermes bag to entice her to change the terms of the deal.

Musk isn’t known for sanity, while Twitter rushed to sell him. This means that there can be a lot of skeletons in the closet. Both parties, and all those who have summoned, do better to ensure that what happened in the Twitter deal stays in the Twitter deal.

obey @GinaChon on twitter

(The author is a Reuters Breakingview columnist. Opinions expressed are his own.)

Context News

Elon Musk’s lawyers issued summons to Salesforce, Integral Ed Science and DoubleVerify as part of the Tesla chief executive’s legal battle over the $44 billion purchase of Twitter, according to an August 18 filing in a Delaware court.

Twitter sued Musk to force him to keep his deal, which he said was terminated for material breaches of his agreement. Twitter chairman Brett Taylor is the co-chief executive of Salesforce, while Integral Ad and DoubleVerify are ad technology companies. Musk is seeking communications in review Twitter accounts to verify authentic users.

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Editing by Jennifer Saba and Sharon Lamo

Our Standards: Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and freedom from prejudice, under the Trust Principles.

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