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Twitter, Elon Musk, and the 'pleasant, unassuming' Delaware judge who may force...

 1 year ago
source link: https://finance.yahoo.com/news/twitter-elon-musk-pleasant-unassuming-122941205.html
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 Elon Musk is not buying Twitter for financial reasons. 
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Twitter, Elon Musk, and the 'pleasant, unassuming' Delaware judge who may force him to pay tens of billions of dollars

Ryan Hogg,Sam Tabahriti
Sun, July 17, 2022, 9:29 PM·3 min read
elon musk
Elon Musk faces a lawsuit from Twitter after pulling out of a $44 billion takeover deal.Yasin Ozturk/Getty Images
  • Kathaleen McCormick will be the judge in Twitter v Elon Musk lawsuit.

  • Columbia Law professor Eric Talley said her record of siding with sellers was bad news for Musk.

  • The Delaware Chancery Court's focus on optics was also bad news for the Tesla CEO, Talley said.

Elon Musk's chances of winning an acrimonious legal battle with Twitter have taken a blow by the appointment of the judge in the trial, a legal expert said.

Kathaleen McCormick appointed herself to oversee Twitter's lawsuit in the Delaware Chancery Court, which followed Musk's decision to abandon a $44 billion deal to buy the social media platform.

Eric Talley, a professor at Columbia Law School who has known McCormick for seven years, told Insider her background meant Musk's chances of winning look slim.

Pleasant, unassuming, and a ruthless record

McCormick has served as chancellor of Delaware Chancery Court since last year. She is notable for previously forcing a buyer to complete an acquisition in circumstances similar to Musk's reasoning for his own withdrawal.

The Chancellor forced private equity firm Snow Phipps Group to close its $550 million acquisition of cake supplier DecoPac Holdings in April 2021 following COVID-19 headwinds. McCormick cited "specific performance" in her ruling to force the deal to be completed.

Specific performance is an equitable, discretionary remedy which, if granted, compels a party to perform a contractual obligation, according to LexisNexis.

"She not only was unsympathetic to them, but even after they had ginned up some resistance amongst their financiers and tried to point to that as a reason they should be allowed to walk away, she wasn't having any of it," Talley said.

The academic saw it as an interesting contrast to a case heard by Delaware Chancery Court's vice-chancellor, Travis Laster, in which he sided with the buyer of a hotel chain in a $5.8 billion deal after it had pulled out using "ordinary course" – something cited by Musk's lawyers in his withdrawal letter.


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