Musk allowed to use Zatko payout in case against Twitter
The world has been closely watching the drama that unfolded between Twitter and Elon Musk. As we are nearing the court battle stage of this saga, Musk has received a boost. Delaware Chancery Court Judge Kathleen McCormick has ruled that the billionaire's team can amend their counterclaims to include the severance payment by Twitter to Peiter Zatko, a former employee turned whistle-blower. Here's more.
Why does this story matter?
When it comes to a court case, every small win is counted. In his legal battle against Twitter, Musk has been getting some small wins recently after some initial setbacks. Zatko's severance payment may or may not help Musk in proving that he was justified in walking out of the deal with Twitter. But it's always better to have the argument ready.
Musk claims Twitter violated merger agreement with Zatko's payout
Twitter entered into an agreement with Peiter Zatko in June to pay him $7.8 million as part of his exit from the company. Musk wants to use this in his counterclaims against Twitter. The billionaire's team argues that Twitter violated the original merger agreement with this payout. The judge has now allowed Musk to amend the counterclaims and use the payout in his arguments.
What does the original merger agreement say?
According to section 6.1 of the merger agreement, "The Company shall use its commercially reasonable efforts to preserve substantially intact the material components of its current business organization." This includes key staff as well. Musk's team argues that Twitter should have consulted with Musk, the incoming chief, in case of any major management change or expenses.
Twitter did not consult Musk while paying Zatko
In Musk's counterclaims, the termination of Twitter's revenue product lead and the general manager of consumer by the company has been mentioned as a violation of the merger agreement. Musk's team argues that he was not consulted while making these decisions. They want to add Zatko's payout to this, as the Tesla CEO was not consulted while making that decision.
Twitter did not oppose Musk's request to amend counterclaims
Twitter is yet to respond to the decision by the judge. However, it is noticeable that the company did not oppose Musk's request in court. While allowing Musk's request, McCormick said Delaware laws allow for "liberal amendment in the interest of resolving cases on the merits." The judge has also allowed Musk to add Zatko's claims about Twitter's lax security, privacy issues, and bots.
