Twitter’s board is in a very difficult position, said Ann Lipton, a professor of corporate governance at Tulane Law School. “They can’t just say, ’Alright, let’s spare us the pain, Elon we’ll let you knock the price down by $20 per share, or we’ll settle, we’ll agree to walk away if you just pay the billion dollar break fee. I mean, Twitter is just not in a position to be able to do that.”
Doing so would risk triggering a lawsuit by Twitter shareholders, she added. Twitter shareholders have already filed a lawsuit against the company and Elon Musk himself over the chaotic deal.
Merger agreements are “very hard to get out of,” and so far, Musk appears to have provided insufficient evidence backing up his claims that Twitter lied about its spam figures, Lipton said…
In order for there to be a “material breach” of the deal agreement, Musk would have to prove that Twitter made false statements that were so egregious they’d have a long term impact on the company’s earnings potential, Lipton said.
“He has yet to put forth evidence that that is in fact the case,” she added.
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