Except for a pat on the cheek, the lawsuit brought against him by Twitter risks that will be expensive Elon Musk. Worst case scenario – that is, the one who sees him rebel against a potentially unfavorable decision – the billionaire risks jail.
What will happen if and when the judge of the Delaware Chancery Court need to decide to agree with Twitter? How do you force a person to make an acquisition worth over $44 billion? These are not rhetorical questions. It’s never happened before, and US corporate law experts are themselves divided.
Even more uncertain: what happens if the judge orders Elon Musk to close the deal, as agreed in May, and not just the payment of a fine? What if Musk disobeys by refusing to close the deal?
Robert Miller, a lawyer interviewed by Business Insider, answers this very last question: “If things get worse, the judge has one last resort.” That is, prison. But before resorting to the nuclear option, the court will likely resort to an arsenal of more common—yet equally painful—tools.
Paying a fine alone may not be sufficient compensation for the damage that Twitter suffers: a publicly traded company that, partly due to the whims of Elon Musk, has lost more than 20% of its value on the stock exchange. And if the court were limited to ordering the payment of a multi-billion dollar fine, Twitter’s stockpile could collapse further.
For that reason, according to Miller, the court will choose to order Musk to complete the acquisition. It’s very rare, especially in cases like this, but at the same time, there may never really have been a case like the one with Twitter and Elon Musk.
Prison is the last resort, before exploring this possibility more conventional but equally painful instruments will be used. The court can Seize Tesla’s stock owned by Musk, where most of his assets are concentrated. Not only that, it can also give a name judicial administrator – what the Americans call Special Master – charged with acquiring the assets of Elon Musk, in such a way that the acquisition is completed as agreed.
The court could also limit itself to ordering the completion of the operation, imposing a hefty fine for each day of default. “If he wanted to, the judge could virtually set a fine of $100 million per day until the acquisition is completed.”
Source: Lega Nerd
