Judge denies Elon Musk’s request to delay trial against Twitter after whistleblower revelations

( Business) — A Delaware judge on Wednesday rejected Elon Musk’s request to delay the trial against Twitter for the agreement of acquisition of US$44 billion, after a former top executive revealed that the company has serious security vulnerabilities.

However, Musk’s team will be able to add arguments to its case based on information that former executive Peiter Zatko disclosed as a whistleblower, thereby insisting that the Tesla CEO be allowed to withdraw from the deal.

The trial is scheduled to begin Oct. 17 and run for five days. Last week, Musk’s lawyers sought to delay the court case by about a month and asked the judge for permission to update their counterclaims in light of what was revealed by Zatko, a former Twitter security chief.

The battle between Musk and Twitter

Zatko maintained that Twitter misled Musk and the public about the prevalence of bots and spam accounts on its platform. Precisely, an issue that Musk put at the center of his argument to end the purchase agreement.

Last week, the billionaire’s team also submitted an additional termination letter which notes that Zatko’s revelations—including that Twitter has serious security breaches and that it violates a 2011 Federal Trade Commission consent order—provides additional justification for Musk to back out of the deal.

Twitter responded with criticism of Zatko and extensively defended itself against the accusations. The company argued that the claims present a “false narrative” of the company and are “riddled with inconsistencies and inaccuracies.” Twitter’s lawyers have also argued that Musk is looking for a pretext to get out of a deal he now considers overpriced.

Delaware Judge Kathaleen McCormick said in her decision Wednesday that “even a four-week delay [del juicio] I would risk causing further damage to Twitter, too great to justify.”

The resolution comes after a hearing Tuesday in which lawyers for Twitter and Musk clashed over changing the trial date. Twitter has denied Zatko’s allegations and opposed the delay, noting that even if the whistleblower’s claims were true, they would not constitute a “material adverse effect” that would allow Musk to withdraw from the deal.

The arguments of Twitter lawyers

Company lawyers portrayed Zatko, fired from Twitter in January, as a disgruntled former employee whose revelation came at a convenient time for Musk.

“Mr. Musk says he has an indictment, but what he really has is a disgruntled ally,” said Twitter attorney William Savitt. For his part, Zatko has repeatedly denied any connection to Musk and said his revelations were not linked to the dispute over the purchase agreement.

Savitt added that Musk’s motion to delay the trial and update his complaint appears to be part of a strategy by the billionaire’s team that seeks to prolong the process to the continued detriment of Twitter. In an earlier hearing, Savitt argued that the continued uncertainty hanging over the company over the pending settlement and lawsuit “inflicts damage on Twitter every day, every hour, and every day. Notably, McCormick previously agreed with Twitter by rule that the trial should be expedited.

“They are trying to crush us all,” Savitt insisted on Tuesday. He later added, “There’s no reason this case can’t be tried on time… We’ll do whatever it takes to make that happen.”

Musk’s lawyers respond

For their part, Musk’s lawyers said they were unaware of Zatko’s concerns before they were publicly reported last month. In that sense, they questioned why Twitter did not previously reveal that their former executive had made allegations of fraud in January ––before Musk’s offer for the company–– nor that Zatko had filed a complaint of irregularities.

“We still don’t know when they found out,” Alex Spiro, Musk’s attorney, said during the hearing. “We still don’t know why they didn’t tell us.”

In his decision Wednesday allowing Musk’s team to add arguments based on the whistleblower’s allegations to their counterclaims, McCormick said he would accept “only incremental discovery relevant to the new allegations … made through the discovery of specific documents and a minimum of additional experts and fact witnesses”. The two sides have clashed over the scope and quantity of the discovery materials.

Spiro told Business on Wednesday that Musk’s team is “hopeful that winning the motion will bring us one step closer to the truth that will be heard in that court. In a statement, Twitter said: “We look forward to making our case.” in court beginning October 17 and we intend to close the transaction at the price and terms agreed upon with Mr. Musk.”

Musk’s lawyers are ready for Zatko to testify this Friday. The top executive is also expected to testify at a audience in the Senate on his accusations next week. Exactly the same day that the shareholders of Twitter they will vote if they approve the acquisition agreement.