They rejected Elon Musk’s request to postpone Twitter’s trial

(CNN Business) – A Delaware judge on Wednesday rejected Elon Musk’s request to delay Twitter’s trial over its $44 billion takeover deal, after a former executive revealed the company had serious security holes.

However, Musk’s team will be able to add arguments to its case based on information that former CEO Peiter Zatko disclosed as a whistleblower, thus insisting that the Tesla CEO be allowed to walk away from the deal.

The trial is scheduled to begin on October 17 and will last five days. Last week, Musk’s lawyers sought to adjourn the case for about a month and asked the judge for permission to update their counterclaims in light of revelations by Zatko, the former head of security at Twitter.

The battle between Musk and Twitter

Zatko confirmed that Twitter misled Musk and the public about the prevalence of bot and spam accounts on its platform. Specifically, an issue that Musk put at the center of his argument for ending the purchase agreement.

Last week, the billionaire team also provided an additional termination letter stating that Zatko’s disclosures — including that Twitter has serious security breaches and is in violation of a 2011 Federal Trade Commission approval order — provide additional justification for Musk to abandon the deal.

Twitter responded by criticizing Zatko and has defended itself extensively against the accusations. The company argued that the allegations provided a “false narrative” about the company and “full of inconsistencies and inaccuracies.” Twitter’s lawyers have also argued that Musk is looking for an excuse to get out of a deal that he now sees as overblown.

Delaware District Judge Kathleen McCormick said in her ruling Wednesday that “even a four-week delay… [del juicio] I will risk causing further damage to Twitter, which is inexcusable.”

The decision comes after a hearing on Tuesday in which lawyers for Twitter and Musk battled over the trial date change. Twitter denied Zatko’s allegations and disputed the delay, stating that even if the whistleblower’s allegations were true, it would not constitute a “material adverse effect” that would allow Musk to withdraw from the deal.

Twitter lawyer arguments

Musk’s legal team summoned the former Twitter security chief 0:51

The company’s lawyers portrayed Zatko, who was fired from Twitter in January, as a disgruntled ex-employee whose timely revelations came to Musk.

“Mr. Musk says he has an indictment, but what he really has is a disgruntled ally,” attorney William Savitt said on Twitter. For his part, Zatko has repeatedly denied any connection with Musk, and said that what he disclosed has nothing to do with the dispute over the purchase agreement.

Savit added that Musk’s proposal to postpone the trial and update his complaint appears to be part of a strategy by the billionaire’s team seeking to prolong the process on Twitter. In a previous hearing, Savitt argued that continued uncertainty about the company over the pending settlement and lawsuit “is hurting Twitter every day, every hour, every day. Notably, McCormick has previously agreed with Twitter under the rule that the trial should be expedited.”

“They are trying to crush us all,” Savit insisted on Tuesday. He later added, “There is no reason not to try this case on time… We will do whatever it takes to make it happen.”

Musk’s lawyers respond

For their part, Musk’s lawyers said they were unaware of Zatko’s concerns before they were made public last month. In that sense, they questioned why Twitter had not previously disclosed the former executive’s fraud allegations in January — prior to Musk’s presentation of the company — nor that Zatko had filed a wrongdoing complaint.

Musk’s lawyers are using information from the Twitter whistleblower on his behalf 1:38

“We still don’t know when they found out. We still don’t know why they didn’t tell us,” Alex Spiro, Musk’s attorney, said during the hearing.

In his decision Wednesday allowing Musk’s team to add arguments based on the whistleblower’s allegations to their counterclaims, McCormick said he would accept “additional discovery related to the new allegations … that is made through the discovery of specific documents and a minimum of additional experts and fact witnesses.” The two sides clashed over the scope and quantity of discovery materials.

Spiro told CNN Business on Wednesday that Musk’s team “hopes that winning the proposal will bring us one step closer to the truth that will be heard in that court. In a statement, Twitter said, ‘We look forward to making our case” in court beginning October 17 and intend to close The deal is at the price and terms agreed with Mr. Musk.”

Musk’s lawyers are ready for Zatko to testify on Friday. The CEO is also expected to testify at a Senate hearing on his allegations next week. Exactly on the same day Twitter shareholders will vote to approve the acquisition.

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