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Elon & Twitter
- Thread starter Buckminster
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Knightshade
Well-Known Member
In the same sense your bank has your checking and savings accounts I suppose.
All of which, plus your stock, can be attached by a court.... IIRC the only thing immune would be $ and shares in a retirement account (and a few things in certain states like a primary residence- but not relevant here).
Doesn't matter what state they're in (well, requires a few more hoops in the 3 states not party to the uniform enforcement act I mentioned- but still doable)
His tesla shares (after they get his cash) would be the most liquid asset--- SpaceX and Boring holdings aren't something you can easily liquidate like a publicly traded stock.
But if we assume it goes by where the person the judgement is against lives (Texas), their version of the uniform judgements act is here:
CIVIL PRACTICE AND REMEDIES CODE CHAPTER 35. ENFORCEMENT OF JUDGMENTS OF OTHER STATES
statutes.capitol.texas.gov
the tl;dr is if you have a judgement in another state, you file proof of that in a texas court and it is then treated as if you have that same judgement granted by a texas court and are free to go after the assets of residents of texas named in the judgement.
Again though, it takes a LOT of crazy for it to get to any of that mattering.
AlanSubie4Life
Efficiency Obsessed Member
Daniel in SD
(supervised)
And yet...
Here's the interview. Not clear if she knows damages in the agreement are capped at $1 billion.
AlanSubie4Life
Efficiency Obsessed Member
Yeah that confused me. Now I wonder whether if the court gets involved whether there is any limit there to damages. The $1B was basically for financing falling apart as I recall (might be wrong).
You’d think courts would also be worried about enforceability of contracts. Balancing act! Seems like giving him a nice price cut may be the middle ground that saves face and then he can claim it was because he was so perspicacious when it came to bots.
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Daniel in SD
(supervised)
Yeah if there is no $1 billion limit on damages it does seem like the equitable solution is to make the shareholders whole (unless of course Elon is able to prove that Twitter's SEC filings are false and to the degree of being a material adverse event).
Maybe they could reduce the $44 billion by the percentage of bots over 5%. I'm picturing a random sample of 100 mDAUs and the two sides arguing over whether each of them is a bot or not. That would be hilarious.
I don't come to TMC often anymore but being a DE resident with several lawyer friends (DE has a ton of lawyers with Chancery Court here) even one at the DE law firm that is 'helping' in this case. Many of these people like to text me, knowing I hold a large TSLA position whenever EM goes to Chancery (aside: way too often for my liking, but I digress). General consensus I get from the lawyer friends is EM is in a bad place WRT Twitter suit. Just one data point.
It’s always a pleasure to hear from you, Al.
Daniel in SD
(supervised)
Here‘s where liability is capped at $1 billion:
”except in the case of a knowing and intentional breach of this Agreement by the Equity Investor, Parent or Acquisition Sub (in which case the Company shall be entitled to seek monetary damages, recovery or award from the Equity Investor, Parent or Acquisition Sub in an amount not to exceed the amount of the Parent Termination Fee, in the aggregate), the Company’s right to receive payment from Parent of the Parent Termination Fee pursuant to Section 8.3(b), shall constitute the sole and exclusive monetary remedy of the Company against the Parent”
”except in the case of a knowing and intentional breach of this Agreement by the Equity Investor, Parent or Acquisition Sub (in which case the Company shall be entitled to seek monetary damages, recovery or award from the Equity Investor, Parent or Acquisition Sub in an amount not to exceed the amount of the Parent Termination Fee, in the aggregate), the Company’s right to receive payment from Parent of the Parent Termination Fee pursuant to Section 8.3(b), shall constitute the sole and exclusive monetary remedy of the Company against the Parent”
AlanSubie4Life
Efficiency Obsessed Member
Yeah, it's confusing that an ex-chancellor would interpret it differently. Maybe it isn't just Elon who doesn't know what's in the contract though!
But it does say "entitled to seek" - maybe the Court of Chancery can award whatever damages they deem fair to the Company regardless of the contract details. I mean, the contract also specifies a price for the sale, and the Court of Chancery can adjust that however they see fit as well to match whatever impairment they deem may be present. So they have some latitude. Is it really possible that they only have latitude in some areas but not others?
It was my impression too that damages were limited to $1B but I guess I just don't know.
AlanSubie4Life
Efficiency Obsessed Member
No, if you go back to the video the ex-chancellor was talking about telling Elon to pay damages to Twitter, but not forcing him to buy it (some sort of middle ground I guess). Or at least that's how I understood it. To be honest, it wasn't clear exactly what was being proposed.
Daniel in SD
(supervised)
I think damages are limited to $1 billion. Wild speculation here but those parenthesis look like they were negotiated after the contract was almost done. Maybe Elon told his lawyers he really wanted to buy Twitter but his lawyers were (rightly) worried that he would violate the terms of the agreement giving Twitter a way to get out of the deal and get significant compensation.
Maybe the Chancellor can award damages not in the contract but Twitter can't ask for them in the lawsuit?
There's also this section which is very friendly to Twitter. If there wasn't a $1 billion cap I bet they would not be seeking specific performance.
"Section 8.2 Effect of Termination. In the event that this Agreement is terminated and the Merger abandoned pursuant to Section 8.1, written notice thereof shall be given to the other party or parties, specifying the provisions of this Agreement pursuant to which such termination is made, and this Agreement shall forthwith become null and void and of no effect without liability on the part of any party hereto (or any of its Representatives), and all rights and obligations of any party hereto shall cease; provided, however, that, except as otherwise provided in Section 8.3 or in any other provision of this Agreement, no such termination shall relieve any party hereto of any liability or damages (which the parties acknowledge and agree shall not be limited to reimbursement of Expenses or out-of-pocket costs, and, in the case of liabilities or damages payable by Parent and Acquisition Sub, would include the benefits of the transactions contemplated by this Agreement lost by the Company’s stockholders) (taking into consideration all relevant matters, including lost stockholder premium, other combination opportunities and the time value of money), which shall be deemed in such event to be damages of such party, resulting from any knowing and intentional breach of this Agreement prior to such termination, in which case, except as otherwise provided in Section 8.3, the aggrieved party shall be entitled to all rights and remedies available at law or in equity; and provided, further, that the expense reimbursement and indemnification obligations contained in Section 6.11 and Section 6.12, and the provisions of this Section 8.2, Section 8.3, Section 8.6 and Article IX shall survive any termination of this Agreement pursuant to Section 8.1 in accordance with their respective terms."
For one thing, the Twitter BOD enacted a poison pill right after Elon started making noises about buying them.
Daniel in SD
(supervised)
Because there's a specific performance clause in the contract. You need to go back and read this thread.
Twitter's lawyers aren't idiots, they know Elon Musk is mercurial (to put it kindly).
"Section 9.9 Specific Performance.
(a) The parties hereto agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Agreement (including failing to take such actions as are required of it hereunder to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions. Accordingly, the parties hereto acknowledge and agree that the parties hereto shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity."
_Redshift_
Member
Because there's a specific performance clause in the contract. You need to go back and read this thread.
Twitter's lawyers aren't idiots, they know Elon Musk is mercurial (to put it kindly).
"Section 9.9 Specific Performance.
(a) The parties hereto agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Agreement (including failing to take such actions as are required of it hereunder to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions. Accordingly, the parties hereto acknowledge and agree that the parties hereto shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity."
Mercury is poisonous.
No wonder they adopted a poison pill!
I’ll stop now.
Daniel in SD
(supervised)
Musk requests Feb. 23rd 2023 trial date (Twitter has requested September).
time.com
“With the sense of humor of a bot, Twitter claims Musk is damaging the company with tweets like a Chuck Norris theme and a poop emoji,”
I wonder if his lawyers wrote this before he explained that the poop emoji was meant to be disparaging. haha.
To state the obvious this probably means Elon does not currently have the evidence to prove that Twitter submitted fraudulent SEC disclosures. It will be interesting to see how much additional information Twitter will be required to provide. Their claim is that while they have complied with his information requests those requests have not been for any "reasonable business purpose related to the consummation of the transactions."
Musk Tries to Slow Twitter's Push for a Quick Trial Over $44 Billion Deal
Musk even chided Twitter officials for being no fun.
I wonder if his lawyers wrote this before he explained that the poop emoji was meant to be disparaging. haha.
To state the obvious this probably means Elon does not currently have the evidence to prove that Twitter submitted fraudulent SEC disclosures. It will be interesting to see how much additional information Twitter will be required to provide. Their claim is that while they have complied with his information requests those requests have not been for any "reasonable business purpose related to the consummation of the transactions."
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Daniel in SD
(supervised)
The filing: DocumentCloud
And the whole point of the human process is to validate the automated process! I must be missing something here.
Maybe this could all be resolved if someone explained to Elon random sampling statistics?
And the whole point of the human process is to validate the automated process! I must be missing something here.
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