Shareholders Not Musk Twitter’s No. 1 Foe?

If “Twitter’s Lawsuit Against Elon Musk Looks Like a Loser” since damages will be hard to prove & judges seldom “order” a $44B deal consummation, are Twitter directors & officers at risk of a shareholder suit?

The idea that Twitter’s suit against the Tesla owner for either damages or “specific performance” aka an injunction will be a hard sell to the presiding Delaware judge was suggested in a WSJ op ed by J.B. Heaton & Todd Henderson. They make a compelling argument by reviewing how these kinds of spats between corporations & suitors “usually” play out … and, for a variety of reasons they expound on, it’s not good news for Twitter. Even the deal’s $1 billion “break up” fee may be iffy “given that Twitter isn’t obviously worse off” by that much cash “if at all.”

The real sticking point for Twitter, Heaton & Henderson maintain, rests upon the sales contract it made with Musk. “The easy fix” for the usual lack of realistic remedies in these scenarios, they note, would have been to “give [its] shareholders the right to sue [Musk] for [any] losses” they might suffer in the parties’ contract … “But either Mr. Musk’s lawyers were too smart for that or Twitter’s weren’t smart enough.” So, are the authors saying Twitter’s board & officers who negotiated the deal with Musk didn’t adequately protect its shareholders interests like they should have? If not, is that shareholder lawsuit another possibility?

Davd Soul