Musk says the whistleblower agreement lets him depart Twitter. Elon Musk has informed Twitter Inc. that he will no longer be continuing with his $44 billion purchase of the social media platform because of a $7 million severance payment to a whistle-blower who raised doubts about problems at the company.
Musk is attempting to cancel his purchase of Twitter on the grounds that the company lied to him and his investors about how many spam and bot accounts were among its 230 million users. Twitter retorts that Musk is just using his bot worries as an excuse to back out of the contract because the world’s richest man has second thoughts.
In a petition made on Friday, Musk’s attorneys claimed that the acquisition agreement required Twitter to inform the billionaire before spending $7.75 million on a parting arrangement with Peiter Zatko, the company’s former security officer, on June 28. Musk’s attorneys claim they found out about Zatko’s arrangement on September 3 when Twitter submitted court documents. Next week, Zatko will address his worries about the platform’s low security, privacy issues, and abundance of bots in front of a US Senate committee. He has also been called to testify in the Twitter litigation.
Twitter has filed a lawsuit to compel Musk to finalize the acquisition, and the trial is scheduled for October. On Wednesday, Judge Kathaleen St. Jude McCormick of the Delaware Chancery Court allowed Musk to amend his counterclaims to include allegations previously made by Zatko. However, she rejected his request to postpone the trial.
Despite an email request for comment, Twitter has yet to provide a response.
The third time Musk has informed Twitter officials that he is pulling his $54.20-per-share bid for the platform due to violations of the purchase agreement covering the transactions, Twitter has responded by saying that they will not accept the proposal.
In order for Twitter to continue operating “in the ordinary course of business” until the legal dispute over Musk’s attempts to derail the purchase are worked out, “this severance payout breached” that condition.