The $ 44 billion buyout of Twitter by Elon Musk faces the former legal challenge. It’s a pension fund in Florida judge Musk and Twitter, arguing that the deal could not be legally completed by 2025 due to the billionaire’s share in the platform. The proposed collective action, filed today by the Orlando Police Pension Fund in the court of the Delaware office, also declares that the board of directors of Twitter has violated its confidentiality obligations by allowing the deal to pass. In addition to Musk and Twitter, the lawsuit also cited former Twitter CEO Jack Dorsey, current Twitter CEO Parag Agraval and the company’s board as defendants.

In a statement to Engadget, Professor Ann M. Lipton of Tulane Law School said the lawsuit raises “some very new issues” under Delaware’s corporate law. Under a law known as Section 203, shareholders who own more than 15 percent of the company cannot merge without two-thirds of the remaining shares approving. Without this approval, the merger cannot be finalized for another three years.

The fund’s attorneys say Musk originally owned approximately 10 percent of Twitter’s stock, which would not seem to make Section 203 applicable. But the fund claims Musk has struck a pact with Morgan Stanley (who owns 8.8 percent) and former CEO Jack Dorsey (who owns 2.4 percent) to speed up the deal. It is alleged that the combined share of these countries makes Musk and his allies in the takeover deal an “interested shareholder” under section 203 – which, if the court agrees with the main arguments presented in this case, means that the merger should or should be postponed, or obtain approval from shareholders representing at least two-thirds of the company’s property.

“Section 203 is not often tried, so the question of whether Musk’s relations with these countries are really considered legitimate goals is an unresolved issue and it will be interesting to see how it develops,” Lipton wrote.

More details about the extremely complicated purchase of Twitter from Musk for 44 billion dollars were announced after the social media platform accepted the billionaire’s proposal last month. New York Times reported that Musk promised the return on investors is nearly five to ten times their investment if the deal is completed. Parts of the transaction are carefully considered, including its readability foreign investors and whether Musk purchased shares in the company specifically to influence its management. But antitrust experts say the merger is unlikely to be blocked by the FTC. The agency will decide next month, whether to approve the merger quickly or launch a longer investigation.

All products recommended by Engadget are selected by our editorial team, regardless of our parent company. Some of our stories involve partnerships. If you buy something through one of these links, we can earn a partner commission.

https://www.engadget.com/musk-twitter-lawsuit-florida-pension-fund-010029248.html?src=rss

Previous articlePulseForge and Merconics to discuss the revolutionary soldering tools in SMTconnect
Next articleJohn Lewis to hire more than 150 technical workers