This past Monday, Elon Musk officially filed an amendment within the Securities and Exchange Commission (SEC) so that he can cement the termination of his previous proposal to buy Twitter.
Musk made the filing to go along with his case for the dissolution of the proposed merger, arguing that new information had come to light since he had sent his letter to Twitter on the 8th of July terminating their merger agreement that would end up strengthening the case for the termination in the event that the original letter was stated to be invalid, as Twitter has attempted to contest the overall validity of the termination notice from July.
“Because the facts described in the August 29 Termination Letter were known to Twitter and withheld from the Reporting Person, and because Twitter has taken the position that the Merger Agreement remains in effect, the Reporting Person sent the August 29 Termination Letter on the basis of the facts described therein,” stated Musk to the SEC.
The attorneys for Musk also sent a letter directly to the chief legal officer of Twitter, Vijaya Gadde, where they delineated the additional facts that had been brought to light. The letter also spoke about the whistleblower report from August 23, 2022, sent out to Congress, the SEC, FTC, and DOJ. The report was filed by Twitter’s former chief security officer, Peiter “Mudge” Zatko, on the 6th of July, 2022.
“The Zatko Complaint alleges far-reaching misconduct at Twitter—all of which was disclosed to Twitter’s directors and senior executives, including Parag Agrawal—that is likely to have severe consequences for Twitter’s business,” stated Musks attorneys.
The legal team also highlighted allegations by Zatko, citing that “Twitter was in material noncompliance with both its obligations under a 2011 FTC consent decree and its general obligations under data privacy, unfair trade practice, and consumer protection laws and regulations … Twitter is uniquely vulnerable to systemic disruption resulting from data center failures or malicious actors … Twitter’s platform is built in significant part on the misappropriation and infringement of third party intellectual property, and Twitter acquiesced to demands made by the Indian government that its agents be hired by Twitter and given access to Twitter.”
The attorney made the argument that the foregoing allegations if proven to be true, highlighted that Twitter had breached many provisions of the merger agreement.
“For the avoidance of doubt, these bases are in addition to, and not in lieu of, the bases for termination described in the July 8 Termination Letter,” concluded the attorneys. “Although the Reporting Person believes the August 29 Termination Letter is not legally necessary to terminate the Merger Agreement because he has already validly terminated it pursuant to the July 8 Termination Letter, the Reporting Person delivered the August 29 Termination Letter in the event that the July 8 Termination Letter is determined to be invalid for any reason.”