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Friday, February 2, 2024

Twitter Subpoenas Musk’s Banks in Struggle Over Acquisition.

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Shortly after Elon Musk filed his response to Twitter’s lawsuit geared toward forcing him to finish his acquisition of the corporate, Twitter has in current days despatched out a rating of subpoenas to the banks which might be backing him within the bid, in addition to to individuals in Mr. Musk’s interior circle. The subpoenas provide some hints about Twitter’s authorized technique — and clues as to what Mr. Musk mentioned in his response to the swimsuit, the DealBook e-newsletter reviews.

Mr. Musk’s response to the lawsuit, filed on Friday, is quickly sealed to the general public whereas he and Twitter work out which components to redact. His arguments thus far have centered on the corporate’s public disclosures about bots and faux accounts, which he has argued are materially deceptive, giving him grounds to stroll away from the deal. (Twitter’s attorneys have requested what, precisely, was deceptive.)

Now, Twitter has despatched subpoenas to the lengthy checklist of banks working with Mr. Musk, together with Morgan Stanley, Financial institution of America and Barclays. The banks are essential gamers within the deal. That’s as a result of Twitter’s capacity to sue Mr. Musk to pressure him to shut the deal (underneath its “particular efficiency clause”) is voided if his debt financing falls aside. However that out solely works if the banks, which have signed dedication letters, stroll away independently — not if Mr. Musk coerces them.

Twitter desires to know extra about how the banks take into consideration bots. Amongst different issues, it desires be taught in regards to the evaluation that banks have accomplished on Twitter’s bot statistics and about investigations they’ve carried out at Mr. Musk’s instruction. Twitter could also be attempting to discern how a lot the banks truly care about bots, and whether or not Mr. Musk has been prodding them to care.

And Twitter actually desires to know what occurred to Bob Swan, a former chief govt of Intel who performed a key position in placing collectively the deal. To assist its allegations that Mr. Musk appeared to cease efforts to finish his financing, which might put him in breach of their contract, Twitter has claimed that Mr. Musk fired Mr. Swan. His alternative was Antonio Gracias, Mr. Musk’s longtime buddy, who “by no means appeared,” in accordance with Twitter’s lawsuit.

Now, Twitter is asking the banks for paperwork detailing Mr. Swan’s firing, and any briefing supplies on the deal that have been equipped to Mr. Gracias. That might be as a result of Twitter is attempting to show that Mr. Musk’s personnel shuffling was simply one other try and quash the deal — and that Mr. Gracias was by no means actually concerned.

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