Thursday, September 29, 2022
HomeBusinessTwitter Subpoenas Musk’s Banks in Fight Over Acquisition.

Twitter Subpoenas Musk’s Banks in Fight Over Acquisition.

Shortly after Elon Musk filed his response to Twitter’s lawsuit aimed at forcing him to complete his acquisition of the company, Twitter has in recent days sent out a score of subpoenas to the banks that are backing him in the bid, as well as to people in Mr. Musk’s inner circle. The subpoenas offer some hints about Twitter’s legal strategy — and clues as to what Mr. Musk said in his response to the suit, the DealBook newsletter reports.

Mr. Musk’s response to the lawsuit, filed on Friday, is temporarily sealed to the public while he and Twitter work out which parts to redact. His arguments to date have focused on the company’s public disclosures about bots and fake accounts, which he has argued are materially misleading, giving him grounds to walk away from the deal. (Twitter’s lawyers have asked what, exactly, was misleading.)

Now, Twitter has sent subpoenas to the long list of banks working with Mr. Musk, including Morgan Stanley, Bank of America and Barclays. The banks are critical players in the deal. That is because Twitter’s ability to sue Mr. Musk to force him to close the deal (under its “specific performance clause”) is voided if his debt financing falls apart. But that out only works if the banks, which have signed commitment letters, walk away independently — not if Mr. Musk coerces them.

Twitter wants to know more about how the banks think about bots. Among other things, it wants learn about the analysis that banks have done on Twitter’s bot statistics and about investigations they have performed at Mr. Musk’s instruction. Twitter may be trying to discern how much the banks actually care about bots, and whether Mr. Musk has been prodding them to care.

And Twitter really wants to know what happened to Bob Swan, a former chief executive of Intel who played a key role in putting together the deal. To support its allegations that Mr. Musk appeared to stop efforts to complete his financing, which would put him in breach of their contract, Twitter has claimed that Mr. Musk fired Mr. Swan. His replacement was Antonio Gracias, Mr. Musk’s longtime friend, who “never appeared,” according to Twitter’s lawsuit.

Now, Twitter is asking the banks for documents detailing Mr. Swan’s firing, and any briefing materials on the deal that were supplied to Mr. Gracias. That could be because Twitter is trying to prove that Mr. Musk’s personnel shuffling was just another attempt to quash the deal — and that Mr. Gracias was never really involved.



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