Is Twitter’s Lawsuit Towards Elon Musk a “Loser”? – #historical past #conspiracy
The merger settlement on this case might be learn in a means that allows a court docket to order Mr. Musk to purchase Twitter—he and two entities he controls agreed they might “not oppose” such an order—by a treatment often called “particular efficiency.” Though litigation is at all times unsure, it’s arduous to think about a court docket would drive the acquisition of a $44 billion company.
Particular efficiency is used fleetingly, and for good motive. . . .
Delaware courts have not often ordered particular efficiency in merger agreements.
Professor Stephen Bainbridge (by the way an occasional co-author of Professor Henderson), disagrees. In an earlier submit, Professor Bainbridge defined why Musk is unlikely to have the ability to stroll away from the deal. In a second submit at this time, he disagrees with the Heaton-Henderson evaluation, stating that particular efficiency is much less uncommon than Heaton and Henderson recommend and reiterating his view that Twitter has a “sturdy case.”
Professor Bainbridge writes:
The variety of instances wherein Delaware courts have been requested to grant particular efficiency of a merger settlement is comparatively small, however the share of these instances wherein Delaware courts have granted particular efficiency in opposition to a purchaser wrongfully searching for to renege is comparatively excessive . . .
particular efficiency clauses of the type at subject listed here are routine and events anticipate–apparently correctly–that Delaware courts will implement them.
Additional, Professor Bainbridge notes, the settlement between Musk and Twitter features a reverse-breakup charge that would value Musk fairly a bit if he refuses to observe by on the deal. Such provisions, imposing a type of liquidated damages, are “presumptively legitimate” in Delaware courts. Additional, Professor Bainbridge provides, it isn’t as if this was not an settlement between subtle events, well-represented by counsel.
Whomever is correct, this can be a case to observe — actually one for the casebooks of the longer term.