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Evercore ISI hosted an expert panel centered around Elon Musk’s court battle with Twitter (NYSE:TWTR) over a $44 billion deal. Eric Talley, Law Professor at Columbia University, and Ann Lipton, Law Professor at Tulane University, took part among other legal experts.
Overall, legal experts see Twitter as having an advantage although “some unknowns that could swing the outcome of the trial,” an analyst said in a note. The consensus among panelists is for this to be a relatively speedy trial and likely concluded by April 25th, 2023.
They also agreed that proving Material Adverse Effect (MAE) is “a very high bar” that requires “proof of the adverse effect to substantially threaten the overall earnings potential of the company in a durationally significant manner.”
“Our panelists believe Musk may not have a strong enough case to prove MAE. One panelist noted that while this is a common argument by buyers in an M&A, there are very few precedents of success in the Delaware court thus far,” the analyst added.
If in the end, Twitter wins this court battle, Musk is very likely to “flat out” comply with the decision. This is because several of his corporations are incorporated in Delaware.
“One panelist also noted Musk’s other ongoing trials in Delaware (including his Tesla compensation package, and SolarCity) could also factor into Musk’s consideration in the event that the court rules against him,” the analyst concluded.
