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A Florida pension fund filed a lawsuit against Tesla Inc (NASDAQ: TSLA) CEO Elon Musk and Twitter Inc (NYSE: TWTR), seeking to delay the merger's closing until at least 2025.
Reuters reported that Orlando Police Pension Fund, has filed a lawsuit in the Delaware Chancery Court. The case is Orlando Police Pension Fund v Twitter Inc et al, Delaware Chancery Court, No. 2022-0396.
Decrypting the lawsuit
The lawsuit stated that Delaware law prohibited a quick merger as other big Twitter shareholders, such as Morgan Stanley (NYSE: MS) and Twitter founder Jack Dorsey, had agreements with Musk, supporting his buyout.
The report mentioned that the fund said those agreements made Musk, who owns 9.6% of Twitter, the effective "owner" of more than 15% of the company's shares. Thus a three-year delay in the merger was required unless two-thirds of shares not "owned" by him granted approval.
The lawsuit named Twitter and its board, including Dorsey and CEO Parag Agrawal, as defendants.
This is not the first time, Musk has been sued with regards to Twitter. On March 14, another Twitter shareholder, Marc Bain Rasella sued Musk alleging that he manipulated Twitter’s share price by delaying an announcement that he had acquired over 5% ownership in the company by March 14, breaking SEC rules in the process.
Source - Reuters