Former Twitter lawyer says he received threats of ‘World War III’ over Musk acquisition deal

SAN FRANCISCO (CN) —  The Twitter lawyer who handled Elon Musk’s multibillion-dollar acquisition of the social media platform in 2022 told a San Francisco jury Monday an attorney for Musk told him it would be “World War III to the end of time” if Musk was forced to go through with the purchase.

“He said ‘I’ve been specifically told to convey a message to you that if Musk is required to go through transaction after trial it would be World War III till the end of time, for real,’” Twitter attorney Martin Korman of Wilson Sonsini Goodrich & Rosati said, referring to a September 2022 phone conversation he had in with Musk attorney Mike Ringler.

(Ringler was with Skadden Arps Slate Meagher & Flom at the time, but is now with Sullivan & Cromwell).

Investors, including lead plaintiffs Steve Garrett, Nancy Price, John Garrett and Brian Belgrave, sued Musk in 2022, accusing him of deliberately making misleading statements about the presence of spam bot accounts on Twitter to drive down the company’s stock, in hopes of backing out of the acquisition deal or renegotiating more favorably for himself.

The plaintiffs claim Musk attempted to artificially lower Twitter’s stock price after agreeing to acquire the platform in April 2022, while also failing to disclose when his Twitter stake exceeded 5% or that he had initially been invited to join Twitter’s board.

Twitter ultimately sold to Musk for $54.20 per share in October 2022, only closing after the company sued Musk to force the deal to go through while he accused the platform of hiding information about fake accounts.

During the sixth day of trial over Musk’s $44 billion buyout of Twitter, plaintiffs’ attorney Caroline A. Yuen of Cotchett, Pitre & McCarthy on Monday asked Korman about his conversations with Musk’s lawyers in September 2022 as Twitter was pursuing litigation against Musk.

Korman testified that Alex Spiro of Quinn Emanuel Urquhart & Sullivan, another attorney for Musk, told him in a phone conversation that it would be “in everyone’s best interest” to settle the case, and if the deal was forced to go forward, Musk would have access to company records and “dig into whatever he wanted to dig into and that might not be comfortable for Twitter people and their heirs.”

Yuen asked Korman about his reaction to statements Musk posted about the agreement, including a tweet from May 13, 2022, where Musk said the Twitter deal was on hold, “pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” A couple of hours later, Musk followed up with another tweet saying he was “still committed to acquisition.”

According to messages revealed in court, Korman wrote an email to Musk’s team on May 13, reiterating that information shared in a meeting planned that day was “confidential and subject to the NDA in place with Mr. Musk” and “merger agreements of course restricts tweets disparaging of the company or its representatives.”

“We expressed surprise that these tweets were out there, so far as they contained information that had been discussed at the morning meeting related to the procedures Twitter used to calculate the prevalence of false and spam accounts,” Korman told the jury regarding his calls with Ringler that day.

Korman further spoke about the communications he had with Musk’s team over Musk’s concerns about false or bot accounts, testifying he proposed Twitter data scientists and Musk’s data scientists meet to resolve any questions Musk had about Twitter’s 5% bot estimation. Musk’s team never took him up on the offer

“Twitter has offered on multiple occasions to have Musk experts in data science meet directly with Twitter personnel to understand more fully the process disclosed in Twitter’s SEC filings about the manner in which the company estimates false or spam accounts as a percentage of mDAU,” Korman wrote in a June 20, 2022, letter to Ringler, referring to monetizable daily active users.

“To date, you have not taken Twitter up on that, but Twitter remains open to doing so," he continued.

During cross-examination, Ellyde R. Thompson of Quinn Emanuel Urquhart & Sullivan, a lawyer for Musk, asked Korman about a letter Ringler sent him on May 31, 2022, asking for more information on the bot problem, stating Musk is willing to “implement protocols to ensure that sharing it with him will not cause damage or competitive harm to the company.”

However, on redirect, Yuen highlighted a letter sent by Korman the very next day, asking Musk’s team for more explanation on why the large amount of data Musk was requesting was necessary, how it would be used, and what steps would be taken to protect the information.

“Did Musk respond with any concrete or detailed protocols?” she asked. Korman responded that he never got a response from Ringler, nor anything directly from Musk.

The plaintiffs also questioned Bret Taylor, former head of Twitter’s Board of Directors, about his interactions with Musk before and during the acquisition agreement.

During the first week of trial, Musk testified that Taylor and the rest of the Twitter Board of Directors defrauded him and that the company had lied in SEC filings about the estimated percentage of fake or spam accounts.

“Musk claimed that you and the other Twitter directors defrauded him, that you literally lied to him. Is that true?” plaintiffs’ attorney Frank Bottini of Bottini & Bottini asked Taylor Monday.

“I always try to act truthfully in my interactions,” Taylor responded.

The plaintiffs rested their case on Monday. However, one outstanding witness is expected to take the stand on Thursday. Ringler and Spiro are expected to testify for the defense Tuesday.

A representative for the plaintiffs declined to comment. Representatives for the defense did not immediately respond to a request for comment.

U.S. District Judge Charles R. Breyer, a Bill Clinton appointee, is presiding over the trial. It is scheduled to continue through March 16.

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