Elon Musk has made an additional claim in his lawsuit to walk away from his acquisition deal with Twitter. He now maintains that Twitter’s decision to pay millions of dollars to a whistleblower it had fired, to get him to walk away from the company, was a violation of the terms of the acquisition agreement, and opened the door to him to walk away from the $44 billion deal to buy the social media company.
Lawyers for Musk wrote in a letter to Twitter Friday, that Twitter’s failure to seek his consent prior to paying Peiter Zatko $7.75 million to walk away from the company violated the acquisition agreement, which explicitly limited how and when Twitter could make such payments.
According to the lawyers, the payment is a violation which, “cannot be cured,” and Musk is now, “not required” to follow through on the deal. A copy of the letter was filed with the Securities and Exchange Commission.
Twitter did not respond to requests for comment.
Twitter has said it is committed to seeing the acquisition deal through under the agreed upon terms, with Musk paying $54.20 per share for the San Francisco-based company. Twitter closed Friday at a price of $42.19 per share.
The whistleblower, a respected hacker known to the community under his moniker Mudge, was Twitter’s top security executive, before he was fired in January. He later came forward to regulators, claiming Twitter had lied to them about how it fights hackers and spam, as well as its security practices.
Musk’s lawyers noted the payoff was part of a June 28th separation agreement between the whistleblower and Twitter. It was ten days after that when Musk declared the acquisition agreement void over Twitter misrepresenting the number of bot and spam accounts on the platform.
Twitter promptly filed suit against Musk in Delaware, seeking to have the court hold him to the terms of the deal and force him to acquire the company at the agreed upon price. The social media giant claimed his assertions were specious and he merely wanted to exit the agreement due to the decline in the market and Twitter’s per share price.
Musk countersued Twitter, and has amended his claims to include the whistleblower’s claims, according to court records.
The trial, to be held in Delaware Chancery Court, is scheduled to begin on Oct. 17.
