Originally published at: Musk sues lawyers paid for forcing his absurd acquisition of Twitter | Boing Boing
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Tired: “I refuse to join any club that would have me as a member”
Wired: “I will sue the lawyers of any company that would enforce having me as it’s owner”
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Or if he’s just an idiot.
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¿Por qué no los dos?
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That’s kind of interesting? Twitter has to continue paying it’s debts before the sale was done, but I’m also sure these deals include measures to protect the buyer from the sellers withdrawing all the cash right before they sign the paper.
Like I can’t sell a whole car to someone, but right before I sign I take the radio and steering wheel.
Being a .000001%er appears petty and exhausting.
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I assume that I am not supposed to interpret this as an admission that Musk’s attempt to weasel out of the deal was so weak and baseless that Twitter could have forced him into it with a much cheaper and lower power law firm?
Because I can’t think of any other argument for why paying basically the most prestigious M&A firm around 0.2% to close by far the most favorable offer anyone was dumb enough to give Twitter management would count as imprudence in breach of fiduciary duty.
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That’s not what happened here, though. Here, it’s like someone offered someone else $5000 for their car that the Blue Book said was worth $2500. And then after they agreed to the deal, the buyer said, “Hey wait, that car isn’t worth $5000. I want out!” And the seller said, “No shit it’s not worth $5000, we never said it was. But we had a deal.” And then they hired a lawyer to sue the buyer. And that suit was successful, so the seller paid the lawyer and then the sale was finalized. This is, frankly, a frivolous lawsuit.
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That is a legal team that knew exactly what they were doing and exactly what kind of person was about to take over. Respect.
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That’s just…very chronologically limited thinking.
It was a good deal for old Twitter, but it’s a bad deal for new Twitter because Musk has loaded it up with all the debt he took on to finance the purchase, and now it’s looking between the couch cushions for spare $billions.
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They didn’t sell off any part of the company just before the deal closed, they simply continued to pay the normal business expenses (including legal expenses) of running a company of that size.
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Musk created this legal fight by buying a company with no due diligence and then trying to back out without paying the breakup fee. The company had a fiduciary responsibility to hire and pay for lawyers that would get it the outcome they were required to achieve for their shareholders if possible: a sale well beyond the value of their asset. Seems very hard for Musk to claim the prior board and management team was not doing their job or that the firm he is suing didn’t achieve exactly what they were paid for. He is the owner of the Twitter suing them, isn’t he? There is no bullshit pulled by the prior Twitter folks here.
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There was no breakup fee. He was stuck, plain and simple. The fee only applied if an external force, say regulators, said “no”.
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Thanks for the explanation. It makes sense and of course it is frivolous, especially for a person that can earn or lose much more than that in any given day.
So what stops the seller from paying the lawyers twice that amount? Or why not just give them a billion dollars?
Watching this go down is so satisfying. Yes, it’s a shame that a once enjoyable and useful place (for some) has gone to shit and the employees have been treated so callously, but I love watching Lone Skum eat shit and act desperate. I don’t have much joy these days, and billionaire schadenfreude is deliciously filling the gap. I need a new hobby.
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I don’t know what the going rate for top-tier corporate law firms is but it wasn’t in the company’s fiduciary interest to pay more than whatever is deemed a reasonable amount for the legal services rendered.
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Maybe it would be a criminal matter then, theft, if the seller dumped value right before the sale.
Understood this is not what the seller did. Just trying to understand a couple details.
Forcing
He waived due diligence.
Basically this then sue the door because it didn’t prevent “flying”.
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If there had been any irresponsible or vindictive spending (which doesn’t seem to be the case) it seems likely that would still be a civil matter rather than a criminal one.
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I think the success fee here is a bit large, but it’s not facially absurd.
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I interpreted this to mean “the board had a fiduciary duty to not sell to a completely incompetent moron.”
Which isn’t even slightly true because the board’s “fiduciary duty” was to make as much money for the existing shareholders as possible.
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