Judge: Musk Can Use Twitter Whistleblower but Not Delay Case

FILE - Elon Musk, Tesla CEO, attends the opening of the Tesla factory Berlin Brandenburg in Gruenheide, Germany, March 22, 2022. Elon Musk will be able to include new evidence from a Twitter whistleblower as he fights to get out of his $44 billion deal to buy the social media company, but Musk wont be able to delay a high-stakes October trial over the dispute, a judge ruled Wednesday, Sept. 7, 2022. (Patrick Pleul/Pool via AP)

Elon Musk will be able to include new evidence from a Twitter whistleblower as he fights to get out of his $44 billion deal to buy the social media company, but Musk wont be able to delay a high-stakes October trial over the dispute, a judge ruled Wednesday.

Chancellor Kathaleen St. Jude McCormick, the head judge of Delawares Court of Chancery, denied Musks request to delay the trial by four weeks. But she allowed the billionaire Tesla CEO to add evidence related to whistleblower allegations by former Twitter security chief Peiter Zatko, who is scheduled to testify to Congress next week about the companys poor cybersecurity practices.

Twitter has sued Musk, asking the Delaware court to force him to go through with the deal he made in April to buy the company. Musk has countersued and a trial is set to start the week of Oct. 17.

Musks legal team has argued that the allegations made by Zatko to U.S. officials may help bolster Musks claims that Twitter misled him and the public about the companys problem with fake and spam accounts. Zatko, a well-known cybersecurity expert known by his hacker handle Mudge, said he was fired in January after raising flags about Twitters negligence in protecting the security and privacy of its users.

The judges ruling followed an hours-long hearing Tuesday at which attorneys for Musk and Twitter argued with each other about the merits of Zatkos claims and the pace at which both sides are producing evidence ahead of the trial.

Twitters attorneys sought to downplay the relevance of Zatkos allegations to the merger dispute, arguing that an initial 27-page complaint he sent to Twitter and a later retaliation clam made no mention of the spam bot issues that Musk has given as a reason to terminate the deal. Zatko never said a word about spam or bots until his July whistleblower complaint, said Twitter attorney William Savitt.

Twitter has argued for weeks that Musks stated reasons for backing out were just a cover for buyers remorse after agreeing to pay 38% above Twitters stock price shortly before the stock market stumbled and shares of the electric-car maker Tesla, where most of Musks personal wealth resides, lost more than $100 billion of their value.

McCormick, the judge, said Wednesday the newly published whistleblower complaint gave Musks team grounds to amend its countersuit but she declined to weigh in on the details.

I am reticent to say more concerning the merits of the counterclaims at this posture before they have been fully litigated, she wrote. The world will have to wait for the post-trial decision.

McCormick, however, sided with Twitters concerns that delaying the trial would make it harder for the company to get back to business.

I am convinced that even four weeks delay would risk further harm to Twitter too great to justify, she wrote.

In afternoon trading, Twitter shares added 5.5% to $40.77.

(AP)

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