The letter, made public on Tuesday, puts forward allegations “not disclosed to parties representing Musk”, thus justifying the abandonment of the acquisition.
Elon Musk invoked in a new letter to Twitter the accusations made by the company’s former security chief, Peiter Zatko, to justify with additional arguments the abandonment of his takeover plan, initially announced in early July.
“Allegations relating to certain facts, known to Twitter before or on July 8, 2022, but not disclosed to parties representing Musk before or on that date, have since surfaced and provide additional and distinct reasons for terminating the agreement of takeover,” wrote Mike Ringler, one of the billionaire’s attorneys, in a letter to Twitter’s legal chief dated Monday and made public Tuesday.
The lawyer discusses the charges of Peiter “Mudge” Zatko, the ex-Twitter security chief, who attacked the platform’s failing cybersecurity and accused the leaders of having lied about the means implemented to fight against fake accounts and spam. The claims of Peiter Zatko, who presents himself as a whistleblower, were sent to two American regulators as well as to the Department of Justice.
The lawyer for the boss of Tesla specifies that these new elements are, according to him, not necessary to justify the breach of the contract, but constitute additional arguments “in the event that the notice of breach of July 8 was deemed invalid, whatever ‘be the reason’.
READ ALSOCSR: true corporate social responsibility
A negotiation to come to avoid the court?
Elon Musk has also filed a document with the policeman of the American Stock Exchange, the SEC, to warn him of additional reasons justifying the abandonment of the acquisition. In early July, the boss of Tesla announced to break the buyout agreement with the board of directors of Twitter, accusing the company of not having respected its commitments by not communicating the exact number of inauthentic accounts and spam.
This decision had led Twitter to sue the billionaire entrepreneur to force him to honor the terms of the agreement. A trial which will begin on October 17 before a specialized court in Delaware and will last 5 days.
Elon Musk’s legal team has asked Peiter Zatko to provide documents and testify in these proceedings, a request accepted by the former Twitter official’s lawyers.
According to Wedbush Securities’ Dan Ives, the accusations from the social network’s former security chief, a few weeks before the trial, are potentially “a huge victory for Musk and could make Twitter’s case more complicated”. For the analyst, this development is likely to push the two parties to negotiate and find a compromise before October 17, which could take the form of a takeover of Twitter by Elon Musk at a renegotiated downward price.