By Tom Hals and Sheila Dang
WILMINGTON, Del. (Reuters) – A trial over Elon Musk’s bid to end his $44 billion deal for Twitter Inc should be delayed by several weeks to allow the billionaire to investigate a whistleblower’s claims about security on the social media platform, Musk’s lawyer told a judge on Tuesday.
“Doesn’t justice demand a few weeks to look into this?” said Musk’s lawyer, Alex Spiro, at a hearing in Wilmington, Delaware.
Last month, whistleblower allegations became public that provided Musk, the world’s richest person, fresh ammunition to bolster what legal experts said was a long-shot attempt to walk away from the deal without paying a $1 billion termination fee.
Twitter’s former head of security, Peiter Zatko, a famed hacker known as “Mudge,” said in a complaint to regulators that the company falsely represented that it had a solid data security plan.
Twitter has dismissed Zatko’s allegations as a “false narrative” and its lawyer accused the billionaire on Tuesday of seizing on the whistleblower allegations to cover up the fact that he supposedly rushed in to buying the company without assessing the risks.
“Mr. Musk is blaming Twitter for his failing to do customary due diligence,” said William Savitt, an attorney for Twitter. He urged the judge to prevent Musk from adding whistleblower claims to his lawsuit but said if allowed, the five-day trial should begin on Oct. 17 as scheduled.
Savitt read an early May message from Musk to a banker that turned up in the litigation in which the billionaire wrote “it won’t make sense to buy Twitter if we’re heading into World War III.” Savitt said it was evidence that Musk is looking for any way out of the deal and his initial claims about bots and fake accounts were merely a pretext to end the deal.
Twitter and Musk have sued each other. The company wants Chancellor Kathaleen McCormick of Delaware’s Court of Chancery to order Musk to buy the company for the $54.20 per share he agreed to in April.
Shares of Twitter ended Tuesday trading at $38.65 per share, up slightly.
McCormick ended Tuesday’s hearing without saying when she would rule.
Musk, who is also chief executive of electric vehicle maker Tesla Inc, initially countersued Twitter for misleading him about the amount of fake or bot accounts on the platform, which he said allowed him to walk away from the deal.
(Reporting by Tom Hals in Wilmington, Del., and Sheila Dang in Dallas; Editing by Matthew Lewis)
