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Twitter subpoenas investment firms backing Elon Musk as legal battle heats up

By Pedro Oliveira Jr.
Twitter subpoenas investment firms backing Elon Musk as legal battle heats up
Twitter has subpoenaed a number of financial powerhouses backing Elon Musk, including Morgan Stanley, Barclays and Bank of America. File Photo by John Angelillo/UPI | License Photo

Aug. 4 (UPI) -- Twitter has subpoenaed a number of financial powerhouses in Elon Musk's circle, heating up the legal battle over his attempts to back out of a $44 billion acquisition deal.

The company this week served legal papers to investment banks that had been in talks with Musk about financing the deal, including Morgan Stanley, Barclays and Bank of America, the New York Times reported.

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Others on the list included venture-capital firms Valor Equity Partners, Craft Ventures and Social Capital.

The subpoenas indicate that Twitter's legal team is seeking to hone in on its theory that the world's richest man abandoned efforts to secure funding for the deal in a breach of their acquisition contract.

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"The Delaware courts themselves are very wary about people who basically have their fingerprints all over self-sabotage," Columbia Law School professsor Eric Talley told the Times.

Musk has said he lost interest in buying Twitter over the number of bots and fake accounts on the social media service, which his legal team has claimed is higher than expected and justified his decision to back out of the deal.

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The company says not so, and has called Musk's legal strategy a "model of hypocrisy" and "model of bad faith" as it attempts to force Musk to follow through with the acquisition.

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"From the outset, defendants' information requests were designed to try to tank the deal," Twitter's legal team said in its lawsuit. "Musk's increasingly outlandish requests reflect not a genuine examination of Twitter's processes but a litigation-driven campaign to try to create a record of noncooperation on Twitter's part."

One of the subpoenaed venture capitalists, Joe Lonsdale, called Twitter's move a "giant harassing fishing expedition."

"I have nothing to do with this aside from a few snarky comments, but got a 'YOU ARE HEREBY COMMANDED' document notice," Lonsdale tweeted.

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The legal showdown is scheduled to take place in a five-day trial at Delaware Court of Chancery.

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