Judge's 'bias' forced me to pay full price for Twitter, says Elon Musk

By Jef Feeley and Isaiah Poritz

 

Elon Musk testified he had to pay full price to buy Twitter Inc. in 2022 because the Delaware judge in the company’s lawsuit to make him consummate the $44 billion deal was “biased” against him. 

Musk has openly complained before about Delaware Chancery Court’s chief judge, Kathaleen St. J. McCormick. But his testimony at a San Francisco trial revisiting the tumultuous buyout marked the first time the world’s richest person has publicly said why he ultimately decided to back down in his fight with Twitter. 

 

Musk told jurors Wednesday that his lawyers warned him that he was unlikely to defeat Twitter’s suit because McCormick “was extremely biased against me.” She issued several pretrial rulings that favoured the company.

 

 

“The lawyers said there was no choice” but to give in, he added.

 

The jury is hearing claims by Twitter investors that Musk defrauded them by manipulating the platform’s share price so he could acquire it more cheaply. On the witness stand, Musk downplayed the market influence of various tweets he posted in 2022 criticising the company, saying he was just speaking his mind.

 

A Delaware court representative didn’t immediately respond outside regular business hours to a request for comment on Musk’s complaint about bias. 

 

In a separate case, McCormick twice voided Musk’s Tesla Inc. pay package — which had set a record for executive compensation in the US when he agreed to it in 2018 — but the Delaware Supreme Court reinstated it in December. 

 

McCormick’s ruling against Musk prompted him to move Tesla from Delaware — corporate home to more than 60% of Fortune 500 companies, to Texas. Other firms, including Dropbox and TripAdvisor, also left the state. To protect its incorporation business, Delaware responded by enacting legislation to give controlling shareholders more latitude under the state’s laws.