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Musk’s lawyers subpoena big banks for records on Twitter deal

Musk’s lawyers subpoena big banks for records on Twitter deal

Billionaire seeks material on how JPMorgan and Goldman Sachs advised platform during negotiations

Lawyers for Elon Musk have subpoenaed JPMorgan Chase and Goldman Sachs for records relating to the billionaire’s plan to purchase Twitter.

Musk has requested the banks turn over “documents and communications” relating to how they advised Twitter during negotiations, which Musk abruptly backed out of last month after offering to purchase the website for $44bn in April, Bloomberg reported on Wednesday.

Musk’s subpoenas also seek to uncover whether Twitter was considering other purchasers for the deal. They come after Twitter issued a dozens of subpoenas of its own against Musk in the past week.

Twitter’s subpoenas targeted Morgan Stanley and other banks acting as Musk’s co-investors in the deal.

The subpoenas on both sides will function to uncover more information ahead of a five-day trial scheduled to begin on 17 October in the Delaware Chancery court, in which Twitter is attempting to force Musk to carry out the deal.

Legal experts say Twitter’s court activity indicates its lawyers wants to know what lenders, investors and advisers were saying to each other about Musk’s behavior after he signed the deal in late April, in an attempt to prove Musk purposely tried to torpedo the financing of his purchase as he began to back out of the deal.

“They suspect that behind the scenes he’s been conspiring to blow the whole thing up,” Minor Myers, a professor at UConn School of Law, told Reuters.

Musk said on 8 July he was backing out of the deal because Twitter allegedly breached the agreement by withholding data about fake accounts on the platform. Twitter has said the fake accounts are a distraction from the only issue that matters, which is the terms of the agreement.

Musk had also said he was walking away because Twitter fired high-ranking executives and one-third of the talent acquisition team, breaching Twitter’s obligation to “preserve substantially intact the material components of its current business organization”.

Musk cannot be ordered to close the deal if financing fails – provided he’s not the cause of the failed funding, according to legal experts.

Experts said Twitter will be interested in understanding lenders’ concerns about the number of fake accounts on the platform, and whether it was an issue for them as Musk has suggested.

JPMorgan and Goldman Sachs declined to comment. Morgan Stanley did not immediately respond to request for comment. Representatives for Musk and Twitter also did not immediately respond.

Reuters contributed to this report

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