Chancellor Kathaleen St. Jude McCormick has scheduled a hearing for 11 a.m. on Twitter's motion to expedite the schedule, which Musk is expected to oppose.
The two companies agreed to a "drop dead" closing date of Oct. 24, with Twitter seeing a four-day trial beginning Sept. 19 on its request for a "specific performance" order requiring Musk to pay up at $54.20 per share and take the keys. The September trial, Twitter argued, would give the Delaware Supreme Court enough time to review Chancellor McCormick's decision while keeping the original deadline.
"It's a little quick. I believe they are asking for more than they are likely to receive "said Lawrence Hamermesh, director of the University of Pennsylvania's Institute for Law and Economics and emeritus professor at Widener University Delaware Law School.
"The drop-dead date is actually not as dropping dead as you might expect," he added, if pressure for a pushback emerges.
Musk and Twitter announced the $44 billion deal on April 25, but within weeks, Musk was voicing — and tweeting — concerns about the proportion of automated "bot" posts in Twitter traffic, the impact on revenue, and Twitter's alleged failure to provide comprehensive data on the issue.
Meanwhile, Twitter's share price fell from $51.20 on the day of the announcement to nearly $38 per share at market close Friday, increasing the premium Musk would pay even more. Although the two companies' agreement includes a $1 billion termination fee in certain circumstances, it also acknowledges a seller's right to demand specific transaction performance unless closing conditions are met.
Twitter filed a preliminary proxy statement with the Securities and Exchange Commission on Friday, setting a date for a special shareholder meeting to allow a vote on Musk's purchase of the company, among other things.
"Twitter believes that Mr. Musk's purported termination is invalid and wrongful, and the merger agreement remains in effect," the proxy stated, adding that the company's board of directors had unanimously approved the terms, that Twitter had sued in Delaware to compel a closing, and that "we are committed to closing the merger on the price and terms agreed upon with Mr. Musk."
Motions to expedite have become more common in the Delaware Chancery Court in recent years. The court routinely orders hearings on the requests and requires, among other things, a showing that the central claims are "colorable," or plausible, and a risk that proceeding on the regular schedule will result in irreparable damage or harm.
In its motion, Twitter stated that "expedition of trial proceedings is essential to ensure sufficient time for this court to grant effective relief and the Delaware Supreme Court to review this court's decision" before Oct. 24.
Chancellor McCormick scheduled the hearing in one of the court's two largest courtrooms, but also ordered an audio-only public access line to be available.
Musk has not yet filed a motion to dismiss or an answer and counterclaims in response to the complaint. However, on July 8, his attorneys sent a letter terminating the merger agreement "because Twitter is in material breach of multiple provisions of that agreement."
Friday, neither side responded to a request for comment.
In his termination declaration, Musk claimed that Twitter "appears to have made false and misleading representations on which Mr. Musk relied when entering into the merger agreement, and is likely to suffer a company material adverse effect (as defined in the merger agreement)."
The parties' material adverse effect definitions are murky, but they refer to "any change, effect, or circumstance that, individually or in the aggregate, has prevented or materially delayed or materially impaired, or would reasonably be expected to prevent or materially delay or materially impair" the merger and related transactions.
Musk will "make arguments designed to get [the chancellor] to think about their case and start hearing their case early on, though they do not expect to defeat the motion," according to Hamermes.
Twitter, which has denied all of Musk's allegations, has accused him of using the bot dispute, as well as complaints about business judgment decisions on staff and spending cuts, as pretexts for exiting the deal.
The social media company also accused Musk of repeatedly violating non-disparagement clauses in the sale agreement, including the use of a "poop" emoji in a tweet in response to Twitter's online backlash.
"With no financing contingency or diligence condition, the agreement gave Musk no way out unless Twitter had a material adverse effect on the company or breached a material covenant. Musk had to try to summon one of these "According to Twitter's complaint.
Twitter focused on reasonable best effort obligations for both parties rather than material adverse effect claims, noting in its complaint that Musk has a "hell-or-high-water" duty to obtain and close the financing commitments for the transaction.
Musk, one of the world's richest men, owns 9.6 percent of Twitter, is the CEO of Tesla Inc., the CEO and chief engineer of SpaceX, and the founder of the tunnel-building Boring Co., among other businesses.