Twitter is seeking records from many of Elon Musk’s close circle of investors, friends and financial backers as the company looks to build its case against the Tesla CEO over his faltering $44 billion takeover, according to the newspaper. The Wall Street Journal American.
Twitter’s goal is likely to be to determine whether Musk has other concerns about completing his agreement to buy the company, beyond what he has said publicly, according to lawyers and academics not involved in the case, who spoke to the newspaper.
It is typical in these merger disputes to seek information from financial institutions that support the troubled deal, but lawyers and academics say that because Musk was taking over the company as an individual, those close to him, including friends and advisors, are potential sources of information about his intentions.
“One email can be crucial, increasing the chances of winning,” Stephen Gillers, a professor at New York University School of Law, was quoted as saying by the newspaper.
The subpoenas requested information and documents, including personal conversations, postal mail, emails, text messages, instant messages, social media contacts, fax and phone conversations, according to court documents.
Among those who took investor notices were Steve Jurvetson, an early investor in Tesla who once served on the automaker’s board of directors, and Mark Andreessen, whose investment firm Andreessen Horowitz committed $800 million for the potential acquisition.
Businessman David Sachs noted his recall on Twitter, posting a photo of a middle finger.
Sachs is among a tight-knit group of activists and entrepreneurs who encouraged Musk to take part in Twitter, according to people familiar with the matter.
Sachs declined to comment on the subpoena. Jurvetson and Andreessen did not respond to a request for comment from the newspaper.
Venture capital investor Joe Lonsdale also referred to his recall on Twitter, calling it a “giant harassment hunting expedition.
Lonsdale said he had nothing to do with the situation between Twitter and Musk “except for some sarcastic comments.”
Twitter alleges in its lawsuit that Musk violated their merger agreement by misusing confidential information, disparaging the company, and failing to make efforts to close the deal.
Legal experts say Twitter’s lawyers are expected to point to Musk’s tweets and make use of data and communications from the subpoena.
The five-day trial is scheduled to begin October 17 in Delaware Chancery Court.
Musk cited doubts about Twitter’s count of fake accounts and spam as the reason for wanting to leave the deal.
He said Twitter had not provided the necessary data and information it needed to assess the prevalence of such accounts and raised questions about Twitter’s methods.
Twitter said in court filings that it provided Musk with the information he requested.
The company has long estimated that less than 5 percent of its daily users are fake accounts. Musk said the number could be much higher, closer to 20 percent.
Musk’s lawyers did not respond to requests for comment on the subpoenas or their legal strategy.