Bankers and advisors who backed Tesla (TSLA) CEO Elon Musk’s $44 billion bid to buy Twitter (TWTR) have been hit with a flood of new subpoenas from the social network’s attorneys. These lawyers want to know what happened in Musk’s private negotiations that led to the now-disputed deal.
On Tuesday, Twitter filed more than a dozen subpoenas in the swift lawsuit to force Musk to move forward with the deal. The deposits directed at Musk’s advisors and potential lenders — including Binance, Factorial Funds, Benefit Street, Bandera Partners and Founders Fund Growth II Management — are added to several other documents issued to Musk’s bankers, investors and partners on Monday. Later Tuesday, Twitter’s attorneys filed subpoenas directed at Citadel founder and CEO Ken Griffin. Similar requests have also been made to Tesla (TSLA) and SpaceX.
Notably, the subpoenas require Musk’s advisers and backers to hand over documents and correspondence that either support or refute Musk’s suggestion that Twitter has under-reported the number of fake or “spam” accounts on the social networking site.
Musk maintains that he backed out of the deal because Twitter does not provide him with data regarding the number of fake accounts, known as bots, running on its platform — and in some cases, spreading misinformation. According to Musk, Twitter’s public representations about the prevalence of bots are misleading, exceeding an estimated less than 5% of mDAUs, or monetized daily active users.
On the other hand, Twitter says it has long made it clear that its estimate may be wrong, and that the Musk bot problem is an excuse to back out of the agreement. Twitter adds that Musk also deliberately tried to spoil the deal with a series of derogatory tweets.
In separate subpoenas directed to Binance and others, Twitter requires companies to turn over any documents and communications related to Musk’s May 15 tweet that claims “some possibility” that Twitter’s percentage of bots and/or fake or spam accounts “may be over 90% of users.” Active daily.
The request continues to claim any documents related to another tweet from Musk on May 17 that reads “20% of fake/spam accounts, while 4 times what Twitter claims, could be much higher.”
The subpoenas also seek from companies “drafts or duplicates of any plans” relating to fake Twitter accounts or spam, along with any media communications relating to spam accounts, and documents addressing the SEC’s Twitter disclosures about spam.
While Twitter’s lawyers maintain that under the merger agreement, the company did not have to hand over the bot data it requested, his lawyers wrote in a July 8 letter to close the deal that Musk needed the fake account information to fund it.
Musk’s lawyers wrote that the bot’s information is necessary “to facilitate Musk’s financing and financial planning of the transaction, and to participate in business transition planning…”
On Musk’s side, his attorneys also issued subpoenas for information regarding Twitter’s termination of the transaction. His attorneys have issued subpoenas to Goldman Sachs and JPMorgan, as well as boutique investment bank Allen & Co.
Twitter subpoenas on Monday sought documents and communications from Musk’s partners and investors, including Silicon Valley investors Chamath Palihapitiya, David Sacks, Joe Lonsdale, Steve Jurvetson, Marc Andreessen, Jason Calacanis and Keith Rabois; Other financial advisors include Credit Suisse and Morgan Stanley.
A Delaware Chancery District judge has granted Twitter a five-day trial in the case, which is set to begin October 17.
This story has been updated to reflect that Twitter also served Citadel’s Ken Griffin with a subpoena in his case against Musk.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter Tweet embed.
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