American inventor and billionaire Ilon Musk continues to find new reasons why he thinks he may back out of his $44 billion agreement to buy Twitter, Variety writes.
In a letter sent to Twitter on Sept. 9, Musk's lawyers refer to the social network's agreement with Peiter Zatko, the former head of security who was fired in January, under which Twitter paid Zatko and his lawyer a total of $7.75 million in severance payments.
This, according to Musk's legal team, violates a provision of the acquisition agreement under which Twitter agreed not to "provide or provide any severance or payment or benefit to any company service provider other than severance or benefit payments in the ordinary course of business in accordance with past practice" without Musk's prior approval. The definition of company service provider includes former Twitter employees, the letter said.
Zatko, whom Twitter describes as a disgruntled former employee, argued in SEC and FTC complaints that Twitter concealed "extremely egregious" flaws in its security and privacy practices, among other problems.
In August, Musk's attorneys cited Zatko's allegations in a letter as further evidence that the multibillionaire's agreement to buy Twitter was invalid. In July, he told Twitter that he was pulling out of the deal because, Musk argued, the company had failed to prove its claim that spam and fake accounts accounted for less than 5 percent of active users.
In July, Twitter sued Musk, demanding that the Tesla and SpaceX CEO honor his agreement to buy out the social media company for $54.20 per share. A Delaware Chancery Court judge has scheduled a five-day trial on Twitter's lawsuit against Musk to begin Oct. 17. The judge handling the case ruled this week that Musk could add the allegations from Zatko's complaint to his counterclaim, but denied Musk's request to delay the start of the trial until November.
Musk, who is Twitter's largest shareholder with a 9.6 percent stake, was initially enthusiastic about the prospect of owning Twitter, floating ideas such as authenticating the identities of all users and charging businesses for using the social network. Attorneys for Twitter argue that Musk chickened out after his personal net worth plummeted along with Tesla's stock price drop.
During a hearing in Delaware state court on Tuesday, Twitter's lawyer read aloud a text message Musk sent to banker Morgan Stanley on May 8 that talked about the acquisition agreement.















