4 ms·

You can’t bribe the judges in Delaware. They can force him to go through with the deal at the agreed price, now at a significant premium on market value, and it

You can’t bribe the judges in Delaware. They can force him to go through with the deal at the agreed price, now at a significant premium on market value, and it’s reasonably likely they will. This was not a genius move.

bediger4000 4y ago
I'm no expert, so what makes Delaware judges specially incorruptible?
- atlasunshrugged 4y ago
  I mean, besides the fact that generally I don't think overt corruption is that much of a problem in the U.S., the fact that anyone involved with this case will be under a massive microscope and that Delaware as the general standard place to do business deals with many large transactions so this one may not be all that impressive to local judges
- cormacrelf 4y ago
  Their reputation and their being paid very well to handle a huge proportion of corporate law in America efficiently and fairly. They’re a huge part of the reason everyone domiciles their companies there.
  - bediger4000 4y ago
    Ok. I had understood corporations chose Delaware merely because of the anti-consumer bias in Delaware's laws, but it's good to hear otherwise.
    - dwater 4y ago
      That may have been part of the original reasoning, but now Delaware has built up the world’s most reliable corporate legal system, and companies like a reliable legal system very much.
- D13Fd 4y ago
  Delaware sets the gold standard on corporate law, and has a special courts of law and equity (the CCLD division and the Court of Chancery) that are set up to handle high-value corporate matters. I don’t think most American judges are susceptible to any kind of bribery (other than jurisdictions where elected judges may expect campaign donations from litigants), but Delaware has to be among the absolute least likely to have that issue.
grey-area 4y ago
Let’s see what happens. I doubt very much the scenario you outline will come to pass. Nobody wants this deal any more and he can drag all their dirty laundry into it (bots, fake daus etc). This will just slowly fade from memory as the lawyers argue and at some point they’ll settle.
- joshuamorton 4y ago
  > Let’s see what happens. I doubt very much the scenario you outline will come to pass. Nobody wants this deal any more and he can drag all their dirty laundry into it (bots, fake daus etc). Twitter shareholders do. If I hold $1m in TWTR today, this deal going through is worth around 500K to me, possibly more if we assume the share value now prices in the buyout potential and will drop otherwise.
- danielmarkbruce 4y ago
  Carl Icahn or Paul Singer would love to deal with it. They might well settle, but it might well be for $15 bill.
elliekelly 4y ago
I think it’s far more likely he’d be on the hook for damages. It would be unusual for a judge to force a sale to a now unwilling buyer. Everyone—Twitter, Twitter shareholders, Musk—would be worse off with that result.
- ImPostingOnHN 4y ago
  twitter share price is currently lower than what he bid, so twitter shareholders would be materially better off
- quickthrowman 4y ago
  Twitter shareholders would be worse off.. how? $54.20 is 55% higher than the current after-hours TWTR share price of $35
  - danielmarkbruce 4y ago
    They can still get cash. Lots and lots of cash.
    - quickthrowman 4y ago
      I suppose shareholders wouldn’t mind a special dividend from lawsuit proceeds that captured a good portion of the spread between FMV and $54.20, especially if they get to keep their equity.
      - danielmarkbruce 4y ago
        Yep, and I'd guess that's the most likely outcome.
tzs 4y ago
It should be noted that this is largely because Musk agreed to it. The normal remedy for breach of contract is for the breaching party to have to pay the other party monetary damages sufficient to put the other party in the monetary position they would have been in had the contract not been breached. Court generally will only order someone to actually go through with the contract (which is called specific performance) if monetary damages won't work for some reason. For example if we have a contract for me to sell you a million microcontrollers at $1 each, which you are going to use to make a million units of some gadget that you are going to sell for a profit of $0.10 each, and I find someone who will give me $2 each for the microcontrollers and so let you know I'm going to breach the contract and sell my microcontrollers to them, a court is very unlikely to order me to honor the contract. They will order me to pay you $100k, the profit you were anticipating making from our deal (and probably attorney fees, and other costs you'd incur dealing with the breach). But, according to this blog [1] at Findlaw: > If Musk tries to abandon the deal, Twitter could sue him and ask for specific performance. This remedy is usually hard to get, but Musk agreed to a powerful specific performance clause in the merger agreement. In fact, he didn't just agree that Twitter could get specific performance. He promised that he wouldn't argue it couldn't (forgive the double-negative). I'm unable to think of any good reason one would agree to that. [1] https://www.findlaw.com/legalblogs/courtside/is-elon-musk-going-to-buy-twitter-or-not/ https://www.findlaw.com/legalblogs/courtside/is-elon-musk-go...
lovich 4y ago
I think the past few years of watching the rule of law degrade in both the public and private world in the US means we shouldn’t take any possibly off the table that relies on the system working correctly

bediger4000 4y ago

I'm no expert, so what makes Delaware judges specially incorruptible?

atlasunshrugged 4y ago
I mean, besides the fact that generally I don't think overt corruption is that much of a problem in the U.S., the fact that anyone involved with this case will be under a massive microscope and that Delaware as the general standard place to do business deals with many large transactions so this one may not be all that impressive to local judges
cormacrelf 4y ago
Their reputation and their being paid very well to handle a huge proportion of corporate law in America efficiently and fairly. They’re a huge part of the reason everyone domiciles their companies there.
- bediger4000 4y ago
  Ok. I had understood corporations chose Delaware merely because of the anti-consumer bias in Delaware's laws, but it's good to hear otherwise.
  - dwater 4y ago
    That may have been part of the original reasoning, but now Delaware has built up the world’s most reliable corporate legal system, and companies like a reliable legal system very much.
D13Fd 4y ago
Delaware sets the gold standard on corporate law, and has a special courts of law and equity (the CCLD division and the Court of Chancery) that are set up to handle high-value corporate matters. I don’t think most American judges are susceptible to any kind of bribery (other than jurisdictions where elected judges may expect campaign donations from litigants), but Delaware has to be among the absolute least likely to have that issue.

grey-area 4y ago

Let’s see what happens. I doubt very much the scenario you outline will come to pass. Nobody wants this deal any more and he can drag all their dirty laundry into it (bots, fake daus etc). This will just slowly fade from memory as the lawyers argue and at some point they’ll settle.

joshuamorton 4y ago
> Let’s see what happens. I doubt very much the scenario you outline will come to pass. Nobody wants this deal any more and he can drag all their dirty laundry into it (bots, fake daus etc). Twitter shareholders do. If I hold $1m in TWTR today, this deal going through is worth around 500K to me, possibly more if we assume the share value now prices in the buyout potential and will drop otherwise.
danielmarkbruce 4y ago
Carl Icahn or Paul Singer would love to deal with it. They might well settle, but it might well be for $15 bill.

elliekelly 4y ago

I think it’s far more likely he’d be on the hook for damages. It would be unusual for a judge to force a sale to a now unwilling buyer. Everyone—Twitter, Twitter shareholders, Musk—would be worse off with that result.

ImPostingOnHN 4y ago
twitter share price is currently lower than what he bid, so twitter shareholders would be materially better off
quickthrowman 4y ago
Twitter shareholders would be worse off.. how? $54.20 is 55% higher than the current after-hours TWTR share price of $35
- danielmarkbruce 4y ago
  They can still get cash. Lots and lots of cash.
  - quickthrowman 4y ago
    I suppose shareholders wouldn’t mind a special dividend from lawsuit proceeds that captured a good portion of the spread between FMV and $54.20, especially if they get to keep their equity.
    - danielmarkbruce 4y ago
      Yep, and I'd guess that's the most likely outcome.

tzs 4y ago

It should be noted that this is largely because Musk agreed to it. The normal remedy for breach of contract is for the breaching party to have to pay the other party monetary damages sufficient to put the other party in the monetary position they would have been in had the contract not been breached. Court generally will only order someone to actually go through with the contract (which is called specific performance) if monetary damages won't work for some reason. For example if we have a contract for me to sell you a million microcontrollers at $1 each, which you are going to use to make a million units of some gadget that you are going to sell for a profit of $0.10 each, and I find someone who will give me $2 each for the microcontrollers and so let you know I'm going to breach the contract and sell my microcontrollers to them, a court is very unlikely to order me to honor the contract. They will order me to pay you $100k, the profit you were anticipating making from our deal (and probably attorney fees, and other costs you'd incur dealing with the breach). But, according to this blog [1] at Findlaw: > If Musk tries to abandon the deal, Twitter could sue him and ask for specific performance. This remedy is usually hard to get, but Musk agreed to a powerful specific performance clause in the merger agreement. In fact, he didn't just agree that Twitter could get specific performance. He promised that he wouldn't argue it couldn't (forgive the double-negative). I'm unable to think of any good reason one would agree to that. [1] https://www.findlaw.com/legalblogs/courtside/is-elon-musk-going-to-buy-twitter-or-not/ https://www.findlaw.com/legalblogs/courtside/is-elon-musk-go...

lovich 4y ago

I think the past few years of watching the rule of law degrade in both the public and private world in the US means we shouldn’t take any possibly off the table that relies on the system working correctly