Musk looks set to delay Twitter lawsuit after whistleblower claims

(Reuters) — Elon Musk is seeking to delay a trial until November over his intention to back out of a $44 billion deal to buy Twitter Inc. and amend his complaint against the social media company, according to court filings, after a whistleblower gave him with new ammunition.

The legal filings came after Musk’s lawyer sent a new letter to Twitter earlier in the day to include a whistleblower report as another reason to scrap the deal.

In July, Tesla Inc. sent its first termination letter to Twitter, accusing it of misleading him about the number of fake accounts on its platform.

Now, he says the problems go beyond the fake accounts to include data security and other issues raised by whistleblowers, creating a new battlefront with Twitter.

Last week, Peiter Zatko, Twitter̵

7;s former security chief, said in a complaint filed with US regulators that Twitter prioritized user growth over reducing spam and falsely claimed it had a solid security plan.

Musk and Twitter have sued each other in Delaware state court and a five-day trial is scheduled to start on October 17.

Musk on Tuesday asked the judge to let both sides continue to brief their cases through Nov. 10, followed by a conference to discuss what evidence they can present at trial. Musk said a trial could begin later this month “depending on court availability.”

The motion to amend his complaint was filed under seal in Delaware Chancery Court.

Twitter wants the court to order Mr. Musk to close the deal at $54.20 a share. Musk filed a countersuit accusing Twitter of fraud.

Legal experts said the whistleblower report introduced uncertainty into Mr. Musk’s settlement with Twitter, rather than dramatically changing a case that corporate law specialists have said favors Twitter.

“A door that remains unused by Musk is federal securities fraud,” said Eric Talley, a professor at Columbia Law School.

Meanwhile, Twitter on Tuesday asked the court to deny Musk’s request for an additional document before 2022, calling the motion a “maneuver to derail the trial schedule.”