Elon Musk Risks Being Forced to Pay Twitter Billions of Dollars by Delaware Judge
American billionaire and businessman, Elon Musk’s chances of winning the lawsuit filed against him by Twitter appears to have taken a precarious position with the appointment of the judge in the trial, a legal expert has submitted.
Kathaleen McCormick has appointed herself to oversee Twitter’s lawsuit in the Delaware Chancery Court, which followed Musk’s decision to abandon a $44 billion deal to buy the social media platform.
According to Eric Talley, a professor at Columbia Law School who has known McCormick for seven years, her background meant Musk’s chances of winning look slim, as reported by Insider.
The Judge Has a Pleasant, Unassuming and Ruthless Record
McCormick has served as chancellor of Delaware Chancery Court since last year. She is notable for previously forcing a buyer to complete an acquisition in circumstances similar to Musk’s reasoning for his own withdrawal.
The Chancellor forced private equity firm Snow Phipps Group to close its $550 million acquisition of cake supplier DecoPac Holdings in April 2021 following COVID-19 headwinds. McCormick cited “specific performance” in her ruling to force the deal to be completed.
The setup of the Delaware court itself, Talley said, could also work against Musk. These courts are small, but wield exceptional power, with the ability to settle disputes with injunctions, or specific performance used by McCormick last year.
They also look at “optics”, Talley said, and can decide what is equitable under the circumstances, including by looking at behavior.
“My sense is that Musk’s brashness throughout this deal is not only undermining some of his already thin legal case about how Twitter breached its side first, but it is also probably making it more and more likely he’s going to suffer a big loss,” Talley said.
