SpaceX founder Elon Musk said the post-launch news conference after the SpaceX Falcon 9 rocket carried the Crew Dragon spacecraft and took off on an unmanned test flight from the Kennedy Space Center in Cape Canaveral, Florida, to the International Space Station. Reacts with. March 2, 2019.
Mike Break | Reuters
Social media company after Elon Musk said it would end its Twitter acquisition Sue and quote millionaires to execute transactions A contractual clause aimed at preventing the parties from canceling the transaction.
Clause known as Specific performanceteeth Often used for real estate To prevent buyers and sellers from closing a transaction without good reason. However, it is also included in a merger agreement as a way to force a buyer or seller to close a transaction, except for serious violations such as fraud.
With a notification to Twitter On Friday In his plan to terminate the deal, Musk’s lawyer had three discussions about why Twitter broke the deal.First, they claim that Twitter fraudulently reported the number of spam accounts., The company has long estimated this to be about 5% of users. Mask needs to prove that the number of so-called bots is much higher and show a “significant negative impact” on Twitter’s business as a reason to close the transaction.
Second, Musk’s lawyer said that Twitter “has a lot of data and information,” even though the contract states that Twitter must provide reasonable access to “property, books, records.” We couldn’t provide it. “
Finally, Musk’s lawyer alleges that Twitter did not comply with the terms and conditions that required his consent before deviating from normal business. Musk launches a general hiring freeze as an example of a decision Twitter made without consulting him, dismissing two “high” employees, dismissing one-third of the talent acquisition team. I’m mentioning what I did.
In a proceeding filed in the Delaware Court of Justice on Tuesday, Twitter said Musk accused him of opposition to the deal because he wanted to close the deal because it was an “excuse” and “the market began to change.” The company sought a trial in court in September.
The Delaware Proceedings Court is a non-judgment court that hears mainly shareholder proceedings and other corporate litigations based on domestic affairs, and has ruled many cases in which a company has forced a sale by citing certain performance clauses. Nothing is as big as the Mask Twitter deal ($ 44 billion), and the details that underpin them are different as well.
yet, Past cases are How the Mask and Twitter dispute ends..
In the case of 2001After winning the bid war, Tyson has agreed to buy meat distributor IBP for $ 30 per share, or $ 3.2 billion. However, when both Tyson and IBP’s business struggled following the agreement, Tyson tried to get out of the deal and claimed that there was a hidden financial problem with IBP.
Judge Leo Strin said he found no evidence that the IBP had seriously breached the contract and that Tyson simply “regretted the buyer.” He said it did not justify stopping the transaction.
The exterior of the Tyson Fresh Meat Factory will be seen in Wallula, Washington on May 1, 2020. More than 150 workers in the factory tested positive for COVID-19, according to local health officials.
David Rider | Getty Images
Strine has determined that Tyson needs to purchase the IBP, taking into account the specific performance clause of the contract.
“Specific performance is the definitive remedy for Tyson’s breach, as it is the only way to properly remedy the harm threatened by IBP and its shareholders,” Strine writes.
More than 20 years later, Tyson still owns the IBP.
However, Tyson’s trading differs in several important ways. Mr. Tyson wanted to allow the judge to leave his deal, partly because IBP’s business had deteriorated significantly after the agreement was signed. Musk argues that false and vague information about spam accounts should walk him.
Also, unlike Tyson’s deal with IBP, Mask’s acquisition of Twitter requires billions of dollars in external funding. It’s unclear how a decision in favor of Twitter will affect the potential financing of a transaction, or whether it could affect closings.
Strine currently works at Wachtell, Lipton, Rosen & Katz. Company hired by Twitter Discuss that case.
In the case of this 2020, South Korea’s financial services company has agreed to purchase 15 US hotels for $ 5.8 billion from ABStable, a subsidiary of Anbang Insurance Group, a Chinese company. The contract was signed in September 2019 and is expected to be completed in April 2020.
Buyers claimed that the Covid-19 shutdown had a significant negative impact on the transaction. The seller has filed a proceeding for specific performance.
Judge J. Travis Laster found that the hotel closure and dramatic capacity reduction violated the “normal course” of the business clause and determined that the buyer could get out of the transaction. ..
Delaware Supreme Court Confirmed the 2021 decision.
In another Covid-related case, LVMH initially agreed to buy jewelry maker Tiffany. For $ 16.2 billion in November 2019. LVMH then attempted to close the transaction in September 2020 during the pandemic, but was scheduled to close in November. Tiffany has filed a proceeding for specific performance.
In this case, the judge did not rule because both sides agreed to reduce prices to explain the drop in demand due to Covid’s recession in the global economy. LVMH agreed We will pay Tiffany $ 15.8 billion in October 2020. The contract was signed in January 2021.
Tiffany store in Midtown, New York.
John Lamparski / SOPA Images | LightRocket | Getty Images
As in the Tyson case, the Delaware Court of Equity ruled that Genesco had fulfilled its obligations, and the finish line had buyers’ remorse for simply making a large payment. The market began to collapse in mid-2007, when the housing and financial crisis began.
However, instead of closing the transaction, both sides agreed to close the transaction, and the finish line paid Genesco’s damages. In March 2008, a credit market crater agreed that the finish line and its major lender, UBS, would pay Genesco $ 175 million, and Genesco received a 12% stake in the finish line.
Genesco is still an independent listed stock. JDSports Fashion agrees to purchase finish line For $ 558 million in 2018.
See: Elon Musk withdraws from Twitter deal, probably heading to court