Twitter v. Musk, the Chancery Case That Did Not Reach a Trial Judgment

Twitter sued to make Mr. Musk close the 2022 merger. He had sent a termination letter four days earlier. The chancellor set a trial. He then said he would close on the April 25 terms. The court stayed the case. The merger closed. A news account says the claims and counterclaims were later dismissed. There is no post-trial opinion in the record this desk opened.

This page is the lawsuit. The offer, the merger agreement, the vote, and the closing 8-K are the acquisition timeline. The company now is X. This page sits on the lawsuits desk.

The July 8 letter

On July 8, 2022, Mike Ringler of Skadden, Arps, Slate, Meagher & Flom wrote to Vijaya Gadde, Twitter’s chief legal officer. The letter is Exhibit P to a Schedule 13D/A filed the same day and accepted at 17:14:38. The letter says Mr. Musk is terminating the April 25, 2022 merger agreement because Twitter is in material breach of multiple provisions, appears to have made false and misleading representations, and is likely to suffer a Company Material Adverse Effect.

The grounds, as that letter states them:

• Twitter breached Sections 6.4 and 6.11 by refusing information he had been requesting since May 9, 2022, including information for an independent assessment of fake or spam accounts. The letter says any cure period had lapsed.
• Twitter’s representation that its SEC filings since January 1, 2022, contained no untrue statement of a material fact was inaccurate. The letter quotes Twitter’s own line that false or spam accounts were “fewer than 5%” of mDAU in the first quarter of 2022. It says a preliminary analysis caused him to “strongly believe” the proportion in the reported mDAU count was “wildly higher than 5%.”
• That representation may also be a Company Material Adverse Effect. The letter says he was still examining whether declining business prospects were a separate basis to terminate.
• Twitter breached Section 6.1, the ordinary-course covenant, by firing two high-ranking employees, announcing on July 7 that it was laying off a third of its talent-acquisition team, instituting a hiring freeze, and losing three executives, without Parent’s consent.

The letter says this is formal notice of termination by X Holdings I, Inc. under Section 8.1(d)(i). Label: His lawyers’ notice. A termination letter is not a court finding that any of those breaches occurred. Twitter’s July 11 Form 8-K calls it a notice of purported termination. That 8-K attaches Twitter’s press release and a July 10 letter from William Savitt of Wachtell Lipton. It does not attach the July 8 notice. The notice is the exhibit to his 13D amendment.

The July 10 letter says the purported termination is “invalid and wrongful” and a repudiation. It says Twitter has breached none of its obligations and has not suffered, and is not likely to suffer, a Company Material Adverse Effect. It says the notice is independently invalid because the Musk parties have breached the agreement, including Sections 6.3, 6.8, and 6.10. It says the agreement is not terminated, the debt and equity commitment letters remain in effect, and Twitter demands that they comply, including reasonable best efforts to close. It reserves the right to specifically enforce. Label: Twitter’s reply. A demand letter is not a judgment either.

The complaint

On July 12, 2022, Twitter filed in the Delaware Court of Chancery. The complaint text this desk read carries the court’s stamp: EFiled Jul 12 2022 04:11PM EDT, transaction ID 67812653, case number 2022-0613. Twitter’s Form 8-K filed July 13 says the complaint seeks specific performance ordering Mr. Musk, X Holdings I, Inc., and X Holdings II, Inc. to perform the merger agreement and consummate the closing. The exhibit list names the case Twitter, Inc. v. Elon R. Musk et al., C.A. No. 2022-0613-KSJM, and it attaches the complaint as Exhibit 99.1.

The complaint’s caption is Twitter, Inc. against Elon R. Musk, X Holdings I, Inc., and X Holdings II, Inc. Paragraph 3 alleges that on April 25, 2022, he agreed to buy Twitter for $54.20 per share in cash, “for a total of about $44 billion.” Paragraph 4 alleges he “personally committed $33.5 billion.” The prayer asks the court to order the defendants to specifically perform and to consummate the closing. The complaint is dated July 12, 2022, and names William Savitt of Wachtell, Lipton, Rosen & Katz among counsel.

Label: Allegations, and the relief requested. A complaint is not a finding. The $54.20 and the “approximately $44 billion” announcement are also on the acquisition page, from the merger agreement and Twitter’s April 25 release. The $33.5 billion figure is the complaint’s. The May commitment letters on the acquisition page are a different document. This page does not merge them into one financing table.

The same 8-K says that as of July 13, 2022, stockholder approval was the only remaining approval or regulatory condition. Label: Twitter’s 8-K. Approval is not the close. The September 13 vote is on the acquisition page.

The expedited schedule, and October 17

CNBC (Lauren Feiner and Jonathan Vanian, July 19, 2022) reported that Chancellor Kathaleen McCormick ruled that day, after a teleconference hearing, for an expedited five-day trial in October. CNBC says Twitter had asked for a four-day trial in September, and that Mr. Musk’s side wanted a trial the next year. CNBC does not print the day of the month.

The day is in her later letters. Her September 7, 2022 letter says the defendants had asked to move the trial, “which is presently scheduled to begin on October 17,” to mid-November. She denied that extension. She wrote that she had already rejected the argument for delay on the motion to expedite, and that “the longer the delay until trial, the greater the risk of irreparable harm to Twitter.” Her October 5, 2022 letter opens: the parties had not filed a stipulation to stay, and no one had moved for a stay, so she would “continue to press on toward our trial set to begin on October 17, 2022.”

Label: CNBC for the July 19 ruling of a five-day October trial. The chancellor’s own letters for the October 17 date. The rest of the October 5 letter is a discovery ruling about text messages and Signal. It reserves a sanctions request for post-trial briefing. It is not a ruling on who breached the merger agreement. The trial it was pressing toward did not happen.

The counterclaims

The public version of the defendants’ verified counterclaims, answer, and affirmative defenses is stamped EFiled Aug 04 2022 05:32PM EDT, transaction ID 67902642, C.A. No. 2022-0613-KSJM. The cover says “PUBLIC VERSION - Filed on August 4, 2022.” This desk did not open a confidential filing from an earlier day, so August 4 is the date on the version that was read.

The counterclaims allege that Twitter’s SEC disclosures contained material misrepresentations that inflated the price. They plead five counts:

The prayer asks for rescission, or findings that would let the buyers terminate, a declaration of a material adverse effect, and compensatory damages. Paragraph 117 alleges that an analysis of one week of Firehose data in early July found false or spam accounts were 33% of visible accounts. The same paragraph says Twitter had not provided data on the accounts that were not visible in that feed, and it assumes a case in which those accounts were all legitimate. Label: An allegation in a pleading, about visible accounts, for one week, using a model the pleading describes. It was not tried. It is not a finding that 33 percent of Twitter’s users were fake.

A public version of the amended counterclaims is stamped filed September 15, 2022. It adds allegations drawn from Peiter “Mudge” Zatko’s whistleblower report. The chancellor’s September 7 letter had granted leave to amend the counterclaims to add those allegations, and had refused to move the trial. Label: Leave to amend, and the amended pleading’s allegations. She wrote that the world would have to wait for a post-trial decision on the merits. That decision was not issued.

The October 3 letter, filed October 4

On October 3, 2022, Mike Ringler wrote again, this time to Twitter’s deal counsel. The letter is Exhibit S to the Schedule 13D/A whose EDGAR index shows a filing date of October 4, 2022, accepted at 15:06:41. The 13D amendment says that on October 3 his advisors sent the letter.

The letter says the Musk parties “intend to proceed to closing” of the April 25 merger agreement, “on the terms and subject to the conditions set forth therein,” pending receipt of the debt-financing proceeds, provided the Court of Chancery enter an immediate stay and adjourn the trial. It gives the notice without admission of liability and without waiver of the defenses and counterclaims. The case number printed in the letter is C.A. No. 202-0613-KSJM. The complaint stamp and the July 13 8-K use 2022-0613-KSJM. The letter drops a digit.

The letter does not restate a price. The price is the April 25 agreement’s $54.20, which is the cash consideration in the closing 8-K and on the acquisition page. Their motion to stay says they “are willing to close the transaction at $54.20,” that closing was expected on or around October 28, 2022, and that the October 17 trial should come off the calendar. Label: A letter, and a motion. Neither is a judgment that the earlier termination notice was withdrawn by a court, and neither is the close.

The October 6 stay

Chancellor McCormick’s letter of October 6, 2022 says the defendants had agreed to close and had moved to stay. It says they stated that closing was expected on or around October 28, 2022. Twitter opposed the stay. She stayed the action until 5:00 p.m. on October 28, 2022. If the deal had not closed by then, the parties were to ask that evening for November trial dates.

Label: A stay. Not a judgment on the complaint or the counterclaims. Not a finding that the July 8 grounds were true or false.

The close, and the dismissal

The merger closed before that deadline. Twitter’s Form 8-K filed October 28, 2022, event date October 27, says Acquisition Sub merged into Twitter on October 27, Twitter survived as a wholly owned subsidiary of Parent, and each outstanding share, with the exceptions in the agreement, was converted into the right to receive $54.20 in cash. The vote, the director slate, and the trading suspension are on the acquisition page. This paragraph is only the fact that the contract the lawsuit was trying to enforce was performed at the agreement’s price.

Bloomberg, in a story carried by Yahoo Finance (Jef Feeley, November 15, 2022), reported that on that Tuesday Chancellor Kathaleen St. J. McCormick dismissed the suit at the request of both Twitter and Mr. Musk, and that she dismissed “any and all claims and counterclaims.” Bloomberg says he had sought to pull out of the acquisition and later completed it. Bloomberg’s docket line is “Twitter v. Musk, 22-0613, Delaware Chancery Court (Wilmington).”

Label: Bloomberg’s account of the dismissal. This desk did not retrieve the dismissal order as its own PDF. A dismissal at the parties’ request is not a verdict, and it is not a post-trial opinion. The September 7 letter had said the merits would wait for that opinion. The opinion was not written. The counterclaims’ 33 percent figure, the “fewer than 5%” fight, and the material-adverse-effect count were not decided in a judgment this desk has read.

On the map

The deal, from the April stake through the October 27 close, is the Twitter acquisition. The platform is X. The other Delaware case, about the 2018 Tesla pay package, is Tornetta. The lawsuits hub is the section.

Sources

Checked October 19, 2026.

The dismissal order was not retrieved as a PDF. Reuters and AP pages for the dismissal were not opened. The account of the dismissal is Bloomberg’s.