Twitter Queries Banks On Musk's Plot To Scuttle $44-B Takeover Deal

Twitter Inc. is attempting to find evidence that Elon Musk tried to torpedo the financing of his $44 billion takeover deal for the social media company while also looking into his motivation for backing out of the deal, legal experts said, Tom Hals reported for Reuters.

Photo Insert: Twitter sent dozens of civil subpoenas this week to global banks such as units of Morgan Stanley.

Twitter sent dozens of civil subpoenas this week to global banks such as units of Morgan Stanley, co-investors in the deal including an affiliate of Brookfield Asset Management Inc., and Musk advisers, according to filings over the past two days in the Delaware Court of Chancery.

The subpoenas seek documents and communications concerning the deal, its financing, and any information on "bot," or fake, Twitter accounts.

They also seek information that the recipients may have about potential impact on the deal from changes in the stock price of electric car maker Tesla Inc., of which Musk is chief executive.

The subpoenas are part of Twitter's lawsuit against Musk seeking to hold him to the deal at the $54.20 per share price he had agreed to. A five-day trial is scheduled to begin Oct. 17 in the Delaware Chancery Court. Experts said the subpoenas indicate Twitter wants to know what lenders, investors, and advisers were saying to each other about Musk's behavior after he signed the deal in late April.

"They suspect that behind the scenes he's been conspiring to blow the whole thing up," said Minor Myers, a professor at UConn School of Law. Musk said on July 8 he was backing out of the deal because Twitter allegedly breached the agreement by withholding data about fake accounts on the platform.

Twitter said the fake accounts are a distraction from the only issue that matters, which is the terms of the agreement.

Musk had also said he was walking away because Twitter fired high-ranking executives and one-third of the talent acquisition team, breaching Twitter's obligation to "preserve substantially intact the material components of its current business organization."

Twitter's subpoenae focused on what they said was the firing of Bob Swan, an operating partner at venture capital firm Andreessen Horowitz who led Musk's efforts to finalize deal finance. He was replaced by Antonio Gracias, a long-time Musk pal, according to the lawsuit.

Brian Quinn, a professor at Boston College Law School, said Twitter seems to want to know if "Gracias had any role in getting financing done or if he was just supposed to slow things down."

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