Twitter Inc has sued Elon Musk to drive him to undergo with the $44 billion acquisition of the social media firm. What occurs if Twitter succeeds and the world’s richest man, who repeatedly taunts securities regulators, refuses to adjust to the court docket order?

CAN A COURT ORDER MUSK TO BUY TWITTER?

Twitter is asking a Delaware court docket to grant “particular efficiency” beneath the phrases of its contract with Musk – in different phrases, drive him to finish the acquisition on the agreed value of $54.20 a share.

The court docket has issued such orders earlier than. Chicken processor Tyson Foods Inc was ordered in 2001 to finish its $3.2 billion deal for meatpacker IBP Inc. Last 12 months the court docket ordered non-public fairness agency Kohlberg & Co LLC to shut its $550 million buy of DecoPac Holding Inc, which makes cake adorning merchandise.

But the patrons in these cases have been corporations reasonably than a person. Never has such particular efficiency been granted on a deal of this scale.

WHAT IF MUSK RESISTS?

The authorized battle between Musk and Twitter will play out in Delaware’s Court of Chancery, which is specified within the merger settlement for disputes.

Delaware can be a well-liked incorporation vacation spot for many U.S. public corporations, together with Tesla Inc and different Musk corporations similar to tunneling enterprise the Boring Co and Space Exploration Technologies Corp, often known as SpaceX.

That provides the court docket jurisdiction over an unlimited quantity of Musk belongings to coerce compliance if wanted. Lawyers stated the court docket would start by holding Musk in contempt and issuing fines till he did as ordered.

“The court docket has capacious powers to implement its orders,” stated Francis Pileggi, an legal professional with Lewis Brisbois in Wilmington, Delaware.

If Musk continued to disregard a judgment, the court docket might order Tesla and different Delaware-incorporated corporations by which Musk owns a stake to freeze his belongings or flip over shares.

“He’d be handled like a deadbeat dad not paying baby assist,” stated Minor Myers, a professor of UConn School of Law. “It wouldn’t be that arduous.”

WHAT HAS THE COURT DONE IN THE PAST?

When Delaware-incorporated ZST Digital Networks Inc was sued in Delaware in 2012 by one among its largest exterior shareholders for entry to its books amid accounting irregularities, the Chinese firm refused to conform. Travis Laster, a vice chancellor or choose on the Court of Chancery, appointed a receiver of the corporate to drive it to show over the data. He additionally allowed the receiver to hunt to arrest executives in the event that they visited the United States.

The court docket has additionally pressured corporations to adjust to orders by warning administrators they are going to be held personally answerable for accumulating fines.

Ann Lipton, a professor at Tulane University Law School, stated there are many examples of people against the court docket’s rulings who use appeals to tug out complying. But they ultimately obey court docket orders and he or she expects Musk will as effectively.

“He’s not really insane,” she stated.

(Reporting by Tom Hals in Wilmington, Del.; Editing by Matthew Lewis)

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