Lawsuit against Elon Musk Regarding Twitter Acquisition Dismissed by Judge. U.S. District Judge Charles Breyer in San Francisco issued a ruling on Monday stating that the plaintiff, William Heresniak, did not have the legal standing to file a lawsuit. The judge explained that Heresniak’s claims focused on alleged misconduct related to Elon Musk’s acquisition of Twitter, rather than questioning the fairness of the acquisition itself.
Judge Dismisses Class-Action Lawsuit against Elon Musk
Judge Breyer further noted that Heresniak failed to demonstrate any harm resulting from Musk’s delayed disclosure of a 9.2% Twitter stake, which, according to the lawsuit, enabled him to purchase additional shares at lower prices before the acquisition was publicly announced. Additionally, the judge stated that Heresniak did not provide evidence of any harm caused by the delayed closing of the acquisition, which occurred 1 1/2 months later than originally planned.
The judge also determined that there was no evidence to support the claim that Elon Musk assisted his friends, Twitter co-founder Jack Dorsey and Egon Durban from Silver Lake private equity firm (who were on Twitter’s board at the time), in breaching their fiduciary duties by favoring their own interests and those of Musk.
Judge Breyer clarified that allowing Dorsey to convert his approximately $1 billion worth of Twitter shares into an equity stake in the new company simply reduced the amount Musk had to pay during the closing of the acquisition. This action did not result in any improper diversion of funds from other shareholders.
Shareholder Lawsuit Over Twitter Buyout Rejected by Judge
There has been no immediate response from Heresniak’s lawyers regarding these findings.
Elon Musk, who is also involved in running the electric car company Tesla Inc (TSLA.O), holds the title of the world’s second-richest person according to Forbes magazine.
Requests for comments from Musk, his holding companies, and Twitter, made by their respective lawyers, have not received immediate responses.
In a court filing on March 3, the defendants referred to Heresniak’s claims as a collection of unrelated grievances against Elon Musk, often lacking relevance.
Heresniak initiated the lawsuit on May 25, 2022, approximately one month after Twitter accepted Musk’s buyout offer of $54.20 per share. The transaction was completed on October 27.
Judge Dismisses Legal Action Against Elon Musk for Twitter Acquisition
Following the acquisition, Twitter has faced challenges in maintaining advertising revenue, as some advertisers have expressed concerns about their ads being associated with hate speech or other inappropriate content due to relaxed content rules.
On May 12, Musk appointed former NBCUniversal advertising chief Linda Yaccarino as the new CEO of Twitter.
Lawsuit against Elon Musk Regarding Twitter Acquisition Dismissed by Judge
The case, identified as Heresniak v Musk et al, is being heard in the U.S. District Court, Northern District of California, with the case number 22-03074
Source: Reauters.com
