In recent weeks the saga between Elon Musk and Twitter has dragged on, but revelations made by whistleblower Peiter Zatko could be the turning point in legal proceedings over the Twitter deal.
This as Musk’s legal team have issued a third termination notice for the deal, with an SEC filing citing a reported $7 million in severance that Zatko received in June this year.
As Musk’s lawyers claim, the severance is in violation of an agreement that exists in the initial acquisition that was tabled before Twitter and its board for the price of $44 billion earlier in the year.
“On June 28, 2022, Twitter entered into a separation agreement with Peiter Zatko under which Twitter made severance payments to Zatko and his counsel totaling $7.75 million. Twitter did not seek Defendants’ consent under Section 6.1(e) before making this payment nor was this payment disclosed to Defendants. In fact, Defendants only learned of this payment when Twitter filed the separation agreement with the court on September 3, 2022,” explains Musk’s team in the aforementioned SEC filing.
“This severance payment violated Section 6.1(e) and cannot be cured. Defendants are thus not required to close under Section 7.2(a) and have an additional basis to terminate the Merger Agreement if the Musk Parties’ termination of the Merger Agreement pursuant to the July 8 Termination Notice and the August 29 Termination Notice is determined to be invalid for any reason… For the avoidance of doubt, these bases are in addition to, and not in lieu of, the bases for termination identified in the July 8 Termination Notice and the August 29 Termination Notice,” they continued.
Whether this is indeed enough to terminate the deal remains to be seen, but given the fact that a judge granted Musk’s legal team the ability to use Zatko’s whistleblower testimony as evidence earlier this month, they may now have a stronger argument than before.
At the time of writing Twitter is yet to officially comment on the filing, as both parties get ready to fight it out in court. Either way, Musk is vehement in wanting to terminate the deal and Twitter is not letting up in forcing him to pay the agreed price for the Twitter deal.
[Image – Photo by Marten Bjork on Unsplash]
