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Friday, March 29, 2024  
18 Ramadan 1445  

Musk’s latest reason to drop Twitter deal - whistleblower payment

The two sides have sued each other and are heading to a five-day trial on Oct. 17
Elon Musk. Photo via Guardian
Elon Musk. Photo via Guardian

San Francisco: Elon Musk on Friday added a severance payment made by Twitter to a whistleblower to the list of reasons he feels entitled to walk away from his $44 billion deal to buy the social media platform. Musk has been locked in a bitter legal battle with Twitter since announcing in July that he was pulling the plug on the purchase of the company following a complex, volatile, months-long courtship.

A termination letter sent to Twitter accused the firm of not informing him about a multi-million dollar severance payment it made in June to departing security chief Peiter Zatko, who went on to file a whistleblower complaint criticizing Twitter’s security practices, according to a copy of the letter filed with the Securities and Exchange Commission.

Zatko ended a stint as the head of Twitter’s security earlier this year, and said in his whistleblower complaint that became public last week that the company falsely claimed it had a solid security plan.

Musk’s lawyers argued that failing to seek his consent before paying Zatko provides another legal basis to break the merger deal with Twitter he inked in April.

Twitter disagreed.

“My friend seems to be arguing that Twitter should have gratuitously told Musk that there existed a disgruntled former employee who made various allegations that had been inquired upon and found to be without merit,” Twitter attorney William Savitt said earlier this week.

Twitter did not respond to a request for comment on Friday.

Musk, the world’s richest man, said in his original termination letter that he was canceling the deal because he was misled by Twitter concerning the number of bot accounts on its platform, allegations rejected by the company.

The two sides have sued each other and are heading to a five-day trial on Oct. 17. Musk wants out of the deal and Twitter is asking Chancellor Kathaleen McCormick of the Delaware Court of Chancery to order him to buy the company for the agreed $54.20 per share.

In a mixed ruling earlier this week, McCormick said Musk could add whistleblowing revelations from Zatko that surfaced in August.

But she denied his request to push back the litigation, saying prolonging the suit “would risk further harm to Twitter too great to justify.”

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Elon Musk

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