Shortly after Elon Musk filed a response to a Twitter lawsuit aimed at forcing the completion of a company takeover, Twitter recently sent numerous subpoenas to banks backing him in the bid. . Even to those close to Mr. Musk. The subpoena offers some hints about Twitter’s legal strategy and also provides clues about what Musk said in his response to the lawsuit, reports the DealBook newsletter.
Mr. Musk’s response to the lawsuit filed on Friday will be temporarily withheld while Mr. Musk and Twitter consider which parts to edit. His allegations so far have focused on the company’s public disclosures about bots and fake accounts, which he considers to be grossly misleading, giving him reasons to walk away from the deal.(Twitter lawyers are asking what exactly is misleading.)
Now Twitter has sent subpoenas to a long list of banks working with Musk, including Morgan Stanley, Bank of America and Barclays. Banks are important players in trading. This is because the failure of Mr. Musk’s debt financing would void Twitter’s right to sue Mr. Musk (under the “Specific Performance Clause”) to terminate the transaction. But that only works if the banks that signed the commitment letter walk away independently, not if Mr. Musk insists.
Twitter wants to know more about what banks think about bots. In particular, I would like to know the analysis the bank has done on Twitter’s bot statistics and the research it has done under Musk’s direction. Twitter may be trying to figure out how much banks really care about bots and whether Mr. Musk cares about them.
And Twitter really wants to know what happened to Bob Swan, the former Intel CEO who played a key role in closing the deal. To back up claims that Musk appeared to have stopped trying to complete the fundraising, Twitter claimed that Mr. Musk had fired Mr. Swan. His replacement was Mr. Musk’s longtime friend Antonio Gracias, who “didn’t show up,” according to the Twitter lawsuit.
Twitter is now requesting detailed documents from the bank regarding Swann’s dismissal, as well as briefings on the transaction provided to Gracias. That may be because Musk’s personnel move was another attempt to void the deal, and Twitter is trying to prove that Gracias was never actually involved.
