Big Technology Podcast - Elon Goes To Delaware — With The Chancery Daily

Episode Date: September 14, 2022

The Chancery Daily is an independent, daily newsletter that covers the Delaware Court of Chancery, the place where Twitter is trying to force Elon Musk to buy it. As this case winds its way through the court's legal process, an editor from The Chancery Daily joins us to break down where the case stands, whether Musk's arguments are working, how Delaware Chancellor Kathaleen McCormick is approaching the case, and what the likely result is. Give this episode a listen and you'll be able to follow the case with far more context than you'd get through just the headlines.

LinkedIn Presents Welcome to the big technology podcast, a show for cool-headed, nuance conversation of the tech world and beyond. And this week we're going to dive really deep into the case that's happening in Delaware. You might have heard about it. Twitter is suing an entity owned by Elon Musk to try to force. the deal. That entity, aka Elon, you know, had agreed to acquire Twitter. They're going to try to force it to close. And we're in this kind of interesting period where that case is going to get

going in earnest in October. But in the meantime, there's been a lot of legal posturing and actually a lot of action in the courtroom that, you know, has gotten some coverage, but I don't think that you've heard about it in the amount of depth that you're going to hear about it today. joining us to break down the case and what's happening in Delaware is the Shancery Daily. It is a publication that you're going to hear about a little bit more depth as we get into our intro. And the reason why I'm referring it to a publication is our guest is going to come on just as the Shancery Daily unnamed and we'll get into why that is. I think we can call her chance. We're trying to figure out the right way to do this.

So bear with us. But anyway, welcome to the show, Shancery Daily. Thanks, Alex. It's great to be here. I'm really excited to have an opportunity to speak to the people about this case. You know, the Chancery Daily is a more a daily publication for basically way down in the weeds for lawyers. We've been publishing for a decade. It was founded by one of my really close friends and former colleagues at a law firm were three pen law grads and a couple of other folks. And I'm here anonymously. quasi and honestly as chance today because the way that we operate the publication is really not one of individual identity. We're a team. We speak as a team. We write as a team. We do everything as a team. So I really, you know, it's really not about me. It's about the publication and the history that we have developed institutionally in our memory over the last 10 years of literally looking at every document that comes in or out of the Court of Chancery in Delaware. So

happy to be here today. Yeah, great to have you here. I don't think, well, at least given your running analysis on Twitter, I haven't found anyone who's watching the closest as closely as closely as you and your team. So it's a real thrill to be able to dig into it, you know, deeply with you. One more question about, you know, in terms of, you know, going as chance today or the chance or daily. Sure. Is the case, my sense is that anything that Elon Musk touches gets like very heated having, you know, tweeted his name once in a while, is the case, you know, that hot and that, you know, has it inflamed such passions that, you know, part of the reason to, you know, stay anonymous is to sort of avoid some of the, you know, the personal attacks that, you know, anyone who seems to

wait into this are getting hit with. Yeah, sure. There's, there's an aspect of that and I've actually tweeted about it, I think, in several different threads. And I'll probably say that too many times today, and I apologize, but I always feel like I've already said everything twice on Twitter, but that's how Twitter works. But I did a thread about sort of the, just the absolute factionalization of this matter into two camps that really have a difficult time dialoguing with one another. You mentioned in your intro that this program is into nuance, and nuance is kind of one of my life passions. And I find that it's just so dramatically missing. I mean, first of all, you've got social media, Twitter, right, is the one party. Then you've got Elon Musk

is the counterparty. You can't really imagine two more factionalizing kind of concepts coming together and having the two groups of people. Plus, you also have, and I should just disclose here, that I don't have a position in this case financially. I don't, I intentionally refrained from taking a position in Twitter, even though I thought it was a pretty good bet early on in the case, because you can see very clearly what it does to people's thinking to have a financial stake in the matter. You can just see it played out every day on Twitter in the discussions. It's just, it's very hard to remain objective or have any kind of neutral position. I'm not saying that there aren't people who manage it, but it's very difficult,

especially if you're not incredibly conscious of what you're doing. Right. It's interesting. It's like, I think you hit the nail on the head, right? It's Twitter. It's an extremely nuanced case. and of course it's going to get a lot of play on Twitter because stuff about Twitter ends up getting discussed on Twitter but it's just like the exact wrong forum to do it. Exactly. You know, I think that like this is why we have the show

is because we can unpack stuff that goes beyond the tweets and the headlines. That's right. It's ironic because our publication is literally the most dense, you know, email publication probably in history. We produce more words per day than I don't know of any other newsletter that even comes close. dive into the absolute idious, bitiest kind of detail

about these things. And then, you know, about a, well, about two months ago, I guess I decided, hey, do we still have that Twitter account? Turns out we were locked out of our original Twitter account that we used to do some pretty banal, generic kind of posting on. And I thought, well, you know, I'll hop on there, see

what's going on, see if people want to talk about this. And, I mean, it has in that sense, our visibility to the public has gone from basically zero to 100. And, you know as fast as the plaid mode or whatever. It's like it's fast in in terms of our growth into the scene of the sort of what I would call kind of pop corporate law. Yeah.

You know, where we're not talking anymore just to attorneys who are literally litigating these things on a day-to-day basis. We're talking to people that have such a wide range of base knowledge about the law or about finance or about corporate finance. But, you know, you've got you've got the whole diaspora. You've got, So trying to speak to people at their level is something that I've also actually talked a lot about on the metal level because I think it's so important to have a place a way to communicate these things. People, our account is proof positive that there's a demand for it. You know, people really want to be engaged in these conversations. And I think that it's so critical to give people an actual nuanced way to play the game, you know, to talk about.

these things because they do matter to everyone. Absolutely. Okay. So in your opening remarks, you said that initially you thought maybe it made sense to take a position on Twitter, meaning I think that you think that Twitter was going to close this deal because Elon had signed an agreement saying he was going to buy the company. And typically when you do that, you buy the company. It's kind of how contracts work. Yeah. But I picked up a little bit on the fact that you said initially. So how's this case going so far and how's it looking for both parties? So I frankly haven't changed my position on how likely I think this deal is to close. I mean, again, I'll do like a little brief momentary lawyerly kind of caveat situation that this is all very nuanced.

This should not be taken as financial advice, et cetera, et cetera, et cetera. I know that there are people who disagree with me and with my entire team on this, but, you know, we do have a pretty exclusive kind of view on it. And we could absolutely be wrong. We could, you know, this case could come out any number of ways. One of the big things about this case is that a lot of it is happening under seal or it's just happening in the normal course of discovery that we don't get to see as outsiders. And so it's really hard to know for sure. Of course, in any legal case, it's impossible to know for sure what's going to happen. But here we're also handicapped by not being able to see the documents yet, by not being able to have a real view into all of the facts on the ground.

But that being said, Twitter has a strong case here. And just for the reasons that you articulated, you know, some of the fundamental principles of murders and acquisitions to go back decades or, you know, certainty of contract, a certainty of you signed the deal. You waived the due diligence that you could have had. You entered into an agreement and that means something in corporate law, in contract law, in law under various domains. It is meaningful and it needs to be meaningful

in order for companies operating to have certainty about things because certainty is incredibly valuable to corporations. And if you look at Chancellor McCormick's most recent decision where she granted specific performance in the DecoPact case during the pandemic last year, she said scoring a win for deal certainty. I grant the motion for, you know, the, I grant specific performance.

So that was, she used to exactly the same provision that in the contract that Twitter has in its favor to force a smaller deal to close, not long ago. That's correct. So the, yeah. Yeah, it was a deal during the pandemic. There are, you know, it was like, I think, oh, some, it was a private equity company that was coming in to buy a cake decorating. that they sell cake decorating provisions to supermarkets and you know basically they had a provision in the contract that said that specific performance was a remedy in the event of an attempted breach and she looked at those facts and she said the equitable remedy here is to specifically perform

on this contract and that brings me to something that we may want to talk about which is you know the court of chancery is a court of equity, not a court of law. And it sounds weird to say it's not a court of law. Yeah, what does that mean? It certainly sounds like, yeah. No, a court of equity is, well, it's a long and storied history, and I can provide people to a link of the official written history of the court of chancery. But in its most basic terms, it means that the court has discretion to fashion a remedy

that is equitable. I'm using all of the terms to define. the term, I know. But it means that the court isn't bound by a certain limitation on what it can do in addressing a situation that it finds to be unfair. Fairness is the golden, the guiding principle here. And so, you know, equitable, in terms of the legal significance between the distinction of equity and law, obviously equity does in some sense fall under the category. of law. But in this distinction that the law makes between equity and law, it means that the court can actually make people do things or stop people from doing things. Usually in civil litigation,

the court can grant money damages when there has been a breach of a contract or of some other type of obligation. But here, the court has specific performance is kind of the ultimate view into what equity means. Equity means you can actually enjoin people to do things. You can make injunctions. You can force people to, for instance, trim hedges as one of the cases in the lower part of the state of Delaware involved a couple of years ago. Wait, that actually happened or they said, do you go cut those hedges? Oh yeah. It was it was a kind of two legacy families in Delaware fighting. It's a, it's an interesting case. But yes, You can actually, the court has this power that isn't granted to all courts, which is to say, you will do this thing or you will not do this thing.

I mean, a huge portion of the cases that the court of chancery hears right now are actually sort of TRO, temporary restraining order cases, well, they come in originally as a TRO for employers that are breaching covenants of, let's say, they had an agreement with their employer that they wouldn't go work for someone else. and then they leave and they go work for a competitor. And then they get sued in the court of chance rate because they want the court to enjoin the person from working at their new job. And that's a big responsibility that the court sees. The court is actually demanding that humans do or do not do things, which is a lot different if you think about it

than just saying, yeah, pay up the money, right? It's much more akin to almost a criminal court where you're actually restraining people's liberty in some way you can say. So specific performance is kind of like the optimal case to imagine what equity means. Equity, specific performance is an equitable remedy in that sense. It's saying do this thing you said you were going to do. Right.

And that's like kind of what's at stake here. So you think that that, you know, because there's that specific performance clause in the contract, you know, basically saying the court can force this deal to close, your position is that they're likely to force Elon to buy to a contract. Now, of course, that would be extraordinary. Nothing like that has ever happened before, at least on this scale. But it does make sense that the logic makes sense that if you sign a deal with that clause in it, then that's sort of, you know, something you have to do when the court is there to enforce it. So that's kind of where I'm, you know, would like to jump into this. Is there anything Elon can say with his team of extremely high-priced lawyers to say, actually, that doesn't apply?

why is this if that's in the contract why is this even case well it's a case i think at bottom because there's 44 billion dollars at stake and there's there's something that we don't really know what elan's perspective is on whether or not he wants to do this deal anymore but presuming that he has not then there's a lot at stake for him right well it seems like he doesn't because he's he's trying to kill it but there's also an argument that he's he's just oh trying to negotiate the price down yeah Yeah, yeah. So, I mean, you know, you can definitely look at it. It's hard to, he's a particularly hard person to read in terms of what he's actually, you know, he, he's sort of at once very transparent, but on the other sense, obviously, he has a whole life that we don't see. Right, exactly. So, you know, it's hard to guess and who knows. But if there, if he doesn't want to do the deal or if he desperately wants to do the deal at a discount and who wouldn't at these, at these prices, sort of a even a. small percentage discount is a whole lot of money. Then, you know, he's going to, I mean,

some people have characterized it as throwing spaghetti at the wall. I think he's well within his rights to try to assert any arguable basis for getting out of this contract that he can find. And he is certainly trying to find one. He has, you know, he has sent Twitter three termination letters now on three different bases. He has a whole host of arguments in his counterclaims that relate to all kinds of things, including Indian government investigations of Twitter and Texas Securities Act claims that seem very tenuous. But, you know, does he have any valid claims? The real question can't be answered until we know more about the facts. Look, he has a theory of the case. And to some degree at this stage,

of the case, even though it's moving fast, that's really all he needs to have. He has a theory that Twitter misrepresented certain things in their 10K. They said that those filings were- That's right. They said that those file in the contract specifically, he had to say, I'm only relying on things within the four corners of this document, but one of the things within those four corners of that document were that the SEC filings were accurate. And so he, he, He's kind of nibbling away at anything that he can to, you know, parse whatever he can pull out to say that this, that there was fraud, that they were lying, that they were concealing things. Now, do we have any public evidence of that? I mean, that's certainly something that people on Twitter, uh, have a fun time debating. Um, you know, we started with the argument, uh, the reductionist version of the argument was Elon's quote, five percent. bots theory, which was already, in my opinion, a misrepresentation of what is actually at stake legally, which was this long paragraph in Twitter's SEC filings, that the details how

they go about the process of determining what is a bot on Twitter, what is a monetizable daily active user, and then how they subtract all the bots. And then after they do that, from the pool of people who they are going to tell advertisers, hey, these are monetizable daily active users. They say, look, our process is, what our process is, it's subjective, it's subject to all these caveats, but we come out around 5% or less of our after-bought removal pool being actually still bots.

And so, you know, Elon and his team have done what they have done to certainly in the common understanding that got misrepresented as if there's more than 5% of accounts on Twitter that are bots, then the deal is off. That is absolutely not the case under the law, no matter how you read things. Right. This is all about monetizable, daily active users. Is this the first termination letter that they sent? So you mentioned three.

That was the first. Number one. And by the way, before we get on to the second one, I'm having trouble to understanding. Is it the fact that there were bots on Twitter or is the fact that Elon's lawyers said that Twitter was not giving them the appropriate information to make the calculation on bots because I've heard both of those things being thrown out as a grounds to try to blow the case up but which is which is it right there are there are two there are two aspects to it and you're right to distinguish them and look this contract is I think 68 pages or something

it's incredibly detailed, right? Anyone who tells you, oh, the contract just says this. You have to immediately look at the miscance because the contract says a lot of things and a lot of them interplay in very complex ways. And also, contract law interpretation is its own wild west of sorts. It has a lot of sort of common law principles

that may or may not be really useful in Delaware. Some of them will be very common to be used in Delaware. others would be really kind of esoteric. So interpreting the contract is this whole ball of wax, bowl of wax. I'm not sure what the expression is, but it's a whole thing. It's a laxie problem. Yeah, exactly.

So, but to your point, there are two separate issues here. There are information rights that Elon says that he has under the contract, which give him the right to information that Twitter promised to give certain information so that he for in his in his understanding so that he could determine whether they had been telling the truth in their SEC filings. The real problem is, you know, what is the scope of that information?

Like, that's a, that's sort of a question of fact that has to be, a determination of fact that has to be made by someone, probably not just some rando on Twitter. But, you know, did they give sufficient information as they agree to do under the information rights? is a question and what is the ramification if they didn't you know i'm pretty sure that there's a strong argument that let's say they just barely failed to give all the information well all that he's really said that he was asking for information about was to prove whether the SEC filings were accurate right that's the only thing he can sort of legitimately fight for because he didn't negotiate some broader set of information rights he negotiated for what he negotiated for

And so then there's like, how do we interpret what he negotiated for? So there is an argument to make, I don't think it's a particularly strong one, but that they didn't give him what he needed. Now, if you actually take him at his word that what he wanted was not a way out of the contract, but actually to determine whether the SEC filings were accurate, then you've got to look at the SEC filings and say, what are we trying to prove or disprove, right? We're not trying to prove or disprove some quote-unquote 5% bots theory. That does not exist. What we're trying to prove or disprove the accuracy of is this long paragraph in an SEC filing that says all sorts of things like, we don't know if this process is good or not. This process may be terrible, but here's the process that we use and this is how the result

comes out and this is what we say. Now, how do you disprove something that is so clearly caveat, that is so clearly has all these you know like these these nuances in it right it's not as simple as him pulling every hundred users on his personal profile and determining whether they're bots it's not even as simple as him getting every tweet in history and every retweet and comment and reply and DM and everything else and then making his own determination it's still not even about that it's about what did they say and was that true or untrue yeah and this this first termination argument sounds just a little ridiculous to almost everybody looking on.

So why don't we go to the second and third ones that they tried? And I imagine they involve, you know, the wild card that's come up recently, which is this whistleblower at Twitter. Yeah, absolutely. And, you know, look, to be fair, despite or in light of or for the reason for why I don't have position in Twitter is because I want to be able to look at this case objectively and I know that that's influenced by so many factors but this whole way

that this whistleblower stuff is coming out like it's not optimal. Yeah, so can you take us sort of at the, you know, from the start, who's the whistleblower and how does that factor into the case? So I think you probably pronounces it Pieter, but might just be Peter

Zatko, also known as Mudge in the information technology community or the cyber security community. Look, he's a well-respected guy who seems like in the absence of all of the stuff that has happened over the last six months, you would have looked at him and said, oh, he's like one of the OGs, right? He's like one of the, he seems like he has a lot of street cred.

He certainly has a lot of street credit with the people in his industry and the people who sort of think the way that he does about cybersecurity issues. Right. And he's the former chief information security officer at Twitter. He was called Head of Security. Right. Yep. Who was fired by Parag Agarwal, the CEO of Twitter in January. So just a few months before the Musk, Elon Musk appeared in the Twitter narrative. I mean, can you imagine this whole thing from Parag's perspective?

It's just like it seems like it's like a Netflix movie waiting to happen. He rises up the ranks from engineer to CTO. and then Jack does what Jack does in the middle. And then all of a sudden he's like CEO and then what happens, right? All of these things happen at the same time. And it's quite insane to think about what it must have been like as a human being from his perspective. But yeah, so, you know, Mudge raises these issues to the, to his, I mean, presumably I think he's reporting directly to Agarwal at that point or to his superior. right and what are the issues that he raised exactly i mean look there's various ways to

categorize these things but generally that you know twitter devs work in a production environment not in like a sandbox environment he that's there's obviously a risk there you're you're working with code that is production code you're he think he has a problem with the sort of up-to-datedness of everyone, Endpoint or Twitter employees' computers, that their latest OS isn't installed, you know, kind of things that you can really see it either way. If you've ever worked with a Silicon Valley company who moves fast and breaks things,

you're probably like, yeah, this is every company in Silicon Valley, right? But if you're on the cybersecurity side, you're thinking, oh my God, this is like, these are bad things, right? I think it's hard for lay people and lawyers, especially, and even or arbitraiserers or anyone who's listening, you know, interest in these things. I think it's hard if you haven't watched these two kind of groups of people interact before, sort of business folks and tech folks, well, IT sort of cybersecurity folks, you might not really get the vibe that's going on here, but the vibe that's going on here is like, for

Mudge, I believe that these things freaked him out. Like, I believe that he looked at this and said, this is absolutely terrible. I also believe that. that's sort of just his opinion, man, you know? It's like, yes, they hired him to be head of security. But also, they have a business plan and a business model and they have to make business decisions, right? The board of directors, the officers and directors, they're the ones who run the company. They have to make final decisions about these things. It turned out that he was very antagonistic when they wouldn't take it they would hear him they wouldn't take his suggestion he was just not okay with that and I look from a personal perspective on his part I can understand that

like it's annoying to be telling your team that the business is on fire and nobody is doing anything about it but the thing is that especially in Delaware the directors and officers of a company are the ones who get to the board of directors run the company right they the the directors and officers are the ones who are the company it's they in Delaware the there's a thing called the business judgment rule and what it means is that courts are not really in a position to question the business judgment of these folks right and so all that they really have to prove is that they made an informed business judgment and that they shared it with the appropriate people now I suppose this is where you get into the question of like did they share

relevant information with the appropriate people. And that's part of what, you know. Right. So what is what is the Musk camp alleging when it comes to these much? Like is this termination letter two and three coming from him? Yeah. And what are those specific arguments that they hold any weight? So unfortunately, it won't be till the end of this week that we see the actual counterclaims that come out of these new termination letters.

But we do get to see the brief articulation and the termination. letters and that the first one involves simply the fact of much existing and that he was a whistleblower and that he had this complaint and you know he both wrote a complaint to twitter at the time right he spent 150 or 170 hours or something of his own time after he was terminated writing up what he thought were these problems at twitter now it's notable i think to to look at that actual document and see that it does not mention mention bots. It does not mention MDOW. It does not mention any of the sort of hot button issues that were at the forefront of this case. However, but it is him saying, yeah. So I'll let you go.

I guess he says that they did violate some of their agreements with the FTC and the SEC. And that potentially grounds for removal or or termination. In his, because if you're relying on the complaints. Right, right. So there's two complaints just to be clear. There's the thing that he wrote to Twitter, which was this report that he wrote up when he was actually fired. He said it in his termination interview, the words that no chief legal officer ever wants to hear, which is, I think you're doing bad things in this company.

And so, of course, the legal team was like, excuse me, what? Could you put that in writing? Could you tell us all about what you think? Because we can't just let you leave your termination interview and walk away with this coming out of your mouth at your exit interview, right? That would not be responsible.

So they ask him to write up what his complaints are. And he does that. Now, he turns in that document. That document says that they're in violation of the FTC consent decree with their information sort of security policies that they are or are not putting in place. And then later, right, so then now we find out that in the intervening months, he's alleging that they wrongfully terminated him. And he's either threatening litigation. We don't know the details of exactly what happened, but we do know that at some point, Twitter was like, here's $7 million. Okay.

Can we be good? Right? And so, but then he writes his whistleblower complaint after that. I'm pretty sure that's the order of things, right? Because I think he received the payment in, in, I guess it's kind of tight there, what was actually happening. In any case, he's received, he's negotiating with Twitter for a settlement of his wrongful termination claim.

to whatever extent, he actually brought that claim, probably just by a letter of an attorney or something. And then he's at the same time writing his whistleblower complaint that he's going to file with Congress. And so, yeah, you can see this from a lot of different perspectives. You can see it at, you know, whistleblower complaints are hard to process as an outsider, because in some way, whistleblowers always seem like aggrieved, wronged employees. And sometimes they legitimately are. But also sometimes they're just legitimately mad at the company for kind of more interpersonal, emotional reasons. And it's hard from the outside without all of the information to determine what kind of a case this is.

Okay. And so basically what Elon's team is saying is that these out, the fact that he existed, the fact that he made these allegations are grounds to let Elon out of the case. You know, so we have the bot answer, and then we have all these answers in terms of these reasons in terms of the Twitter breaching its agreement with the FTC and lying to the SEC. Yeah, go ahead. Let me clarify on the two grounds for termination, then on the second and third letters that Musk sent to Twitter. Second one is you had this thing with Musk and, sorry, with Mudge, and you didn't tell us about it. You didn't disclose it to the right people internally. seems material. I mean, it does seem like you'd want to let the person who's acquiring the company know that the head of security was blowing the whistle on the company. It absolutely does. However, you also have, as a sophisticated party entering a $44 billion transaction over a weekend, you have a strong responsibility, especially under the law of Delaware corporate, the sort of body of Delaware corporate law.

You have a very high bar for the questions and the information that you demand, right? So, yes, of course, I mean, my first response, too, was like, hmm, it seems like a little unfortunate that this is coming out this way now. It's not a good look for Twitter. You can't imagine. But at the same time, they are literally being advised by the best legal team on the face of the earth. I don't know.

Like, they have very good lawyers. The idea that their lawyers would have allowed them to do. something on the facts that was so egregious if it wasn't for the fact that Musk didn't ask any questions. He just said, I want to buy this. He basically didn't even say that. He said, look, I'm either going to buy it or I'm going to sell my 9.2% stake and tank your share price, which is it? Like, it doesn't really seem like the Twitter board didn't really have a choice but to accept his offer. And he's the one who made the offer, right? They negotiated a deal.

He chose not to ask certain questions, and that counts for a lot in this court. Yeah. So we'll talk about the chancellor who's hearing the case a little bit in the second half. And let me just also the third one real quick. Sorry. Yeah. The third one is just that they made him a payment of $7.75 million. And I believe that the grounds or that Musk alleges that one that was out of the ordinary course of operations and that he wasn't, he did not give

his consent. So in the contract, he did negotiate for information and consent rights. But there's always a complicating factor, right? We don't know the details of this, but in one of her recent opinions, the chancellor has this mention, one of those things where she just drops a really important fact in the middle of the room, which is Musk has been, apparently, we don't have the details publicly, but she alleges, which I trust her, that Musk has been withholding consent. for everything that Twitter has asked for. Basically, you're not allowed to do that. You're not allowed to say, let me have consent rights

and then just irrationally or unreasonably withhold consent on everything because you can basically hold the company hostage while you're in court trying to negotiate your way out of the deal. So she did not like the fact that he had been withholding his consent for basically normal things that the company wanted to do. And so is it a bad look that they didn't ask him for consent if they didn't about the $7.75 million, it really matters whether it was a settlement

or whether it was a rights plan because under the contract, there's a differentiation and they have up to a $25 million cap on settlements that they can make without his consent. So it's another thorny issue, but that's what the third termination letter is about.

Okay. So let's take a break. And then when we come back, I want to hear your perspective about, we're going to talk, We talked a little bit about the court, but I want to talk a little bit about Chancellor McCormick, who's hearing this case, and then somehow how these specific arguments that we've brought up in the first half are actually playing out, and then where we think this case is going, if we don't know exactly. Maybe we'll take some guesses. All right. So we'll be back here in a moment with Chance, Chance to Read Daily, here on Big Technology Podcasts. Stay tuned. We'll be back right after this. Hey, everyone. Let me tell you about the Hustle Daily show, a podcast filled with business.

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And we're back here for the second half of big technology podcast, Chancery Daily, which is great newsletter and Twitter account. You can find the Twitter account. What's the exact handle again, is it? Chance three underscore daily because we got locked out of her first one and then things escalated rapidly. Okay, great. So make sure to include the underscore there. So why don't we kick off the second half? Just I want to hear about how these arguments are playing out in the court, which you've been watching very, very closely. So first of all, tell us about the channel. The Chancellor, this is, so the Chancery Court has some vice chairs, but then it has the person who's, who runs the thing effectively. And that's who's hearing it, Chancellor McCormick.

That's right. Chancellor Kathleen St. Jude McCormick, she has been on the court since 2018. She has been Chancellor since 2021, I believe. I think that the KKIC decision that she put out in 2021, that was the one we mentioned about also granting specific performance, was her last opinion that she put out. as vice chancellor before she was elevated to chancellor to replace chancellor Bouchard. So she's, what can I say about her? She has just, this case has been very exciting to me personally because it has been this

incredible opportunity for the world to see what we have known at the Chancery Daily for the last decade that we have been doing this. As long as she's been on the court, certainly. And even when she was a practicing attorney, she was one that you would listen to her hearings as a practicing attorney, and you would just be like, wow, man, this woman is amazing, right? She just always nails the heart of the matter, like so thoroughly and so clearly and succinctly. And she has been guiding the court through a period of a big expansion. the court went from five to seven

members. So there are both there's the chancellor, then there are vice chance and there are also masters in chancery. They handle matters that then need the vice chancellor or chancellor to sign off on if the parties file exceptions to them anyway. So there are nine members of the court,

broadly speaking, there are seven Chancellor and Vice-Chancellors, there's just only one chancellor, obviously. But Chancellor McCormick is what we know about her. She's a big Notre Dame fan. She supports New Rochney a lot. She's no nonsense, right? Like, that's the thing. She is absolutely no nonsense.

People expected this court to sort of fold Elon's, you know, this big multibillionaire and didn't want to do something in our country. We typically are used to having big multibillionaires who don't want to do things, not have to do them. But it does seem like she is hearing a lot of Elon's arguments and calling them out for being as, you know, some of them as ridiculous as they are, which has been a surprise to me because, you know, I, my belief, I'm kind of on the other side of this issue than you. I think that Elon will either get out of it or, you know, settle it for, you know, some amount of money that that might not be too painful for. It might be a little bit painful. but it does seem like every little game that he's trying to play that you would like say okay

maybe he can wiggle out of it now she's calling him on it yeah it's kind of like the worst nightmare for the Elon legal team she is the thing that I think is like she is the in that sense the perfect foil if I don't really like setting up as an adversary of battle between the two of them but if you had to imagine a perfect judicial foil for Elon Musk's kind of shenanigans if you believe that he engages in such things then she's kind of the the the Elon does engage in shenanigans everybody agrees on that sorry go ahead it's true some people just like it some people think it's some people think it's good something that we all agree we all agree on something look at that um but no she's she's the thing of better is that she's quite unassuming she is you know

not a really loud boisterous person she's very um opposite of sort of Elon's presence in on social media in the way that he, you know, makes product announcements and grand pronouncements about the master plans and this and that. Like she's sort of the other end of the spectrum. She is no nonsense. She is always business. She is incredibly fair. She has just integrity like, like no one I really, you know, can even compare her to.

She's just simply a straightforward, what you see is what you get. What the law says is what you get. We're not going to treat. read anyone differently in this court. And, yeah, I mean, look, she's, she's probably a new experience for him in the sense that nothing gets by her, right? You're not going to pull the wool over her eyes. You're not going to confuse her with a bunch of different termination letters.

You're not going to change your argument so many times that she gets thrown off kilter. Like, this is a thing that does not happen to her. She sees through, she deals every day with the nonsense. sense of litigants who are obsessed with litigating long, crazy, intricate, expensive battles over tiny points of minutia. And she sees the big picture and she sees the very little picture. She's incredibly good at seeing the macro and the micro in the same moment to really come to the heart of things.

And so I don't think that he's really ever come up against an institution that had that going for it. Can I go out on a limb and say that effectively what Elon is trying to say is hold up is that, yes, he didn't do due diligence, but Twitter should have respected, you know, the law when disclosing things to the SEC. And, you know, they, and he's saying they lied and that, therefore, he should get out of the case. That seems to be one of the main pillars of his argument. Yeah. How is the chancellor treating the fact that Elon is putting that argument up, given that he did. effectively, and you can call me

if I'm wrong on this, but effectively he waived his right to due diligence, right? He did this deal over a weekend, effectively with a shotgun to Twitter's heads. Yeah, I mean, look, she said it in the hearing herself. She said, basically, all shucks, it's too bad. You guys didn't do due diligence and we'll never know what you could have found out

if you had just tried, right? She chuckled and she said, well, we'll never know what you could have discovered because you didn't do any due diligence. And look, she has a long and deep background in murders and acquisitions law, obviously being in the position that she's in, but also being in a practice that she was in. She really grocks everything about M&A generally. Like she just, she has the whole historical picture. She knows every reference that every

attorney will throw out there offhandedly. She gets all of it and she incorporates it all into her thinking. And she knows that deal certainty is incredible. It is the paramount concern, I would say. I mean, protecting shareholders, the way that you do that is that you make sure that deals, that there is deal certainty. Deal certainty is like a huge imperative of what this court wants to provide. Because otherwise, what is the alternative? Someone can come along and throw a grenade into the waters of your company's value and the market price and just throw everything off kilter and then just go, nah, no thanks.

You know, just kidding. She said this is not, we don't do just. just kidding. This is in expedited litigation. But we don't do just kiddings is in any context as far as she's concerned when you're talking about a $44 billion transaction. Yeah. Has she shown any willingness to hear any parts of Elon's argument? For one, I think that she's allowing some of this whistleblower testimony. And if you're if you're on Elon's legal team, is there anything that you're reading into what she's saying and and you know, that gives you a sense that you might way. I mean, look, she's doing her absolute job and her level best, which is way more than

sufficient to make sure that Elon has every opportunity to try his case in this matter, even though it's so expedited. She is allowing these amendments to come in. She is, you know, even though, look, the point would be, okay, due diligence is where you find these things out about the company. If the company has a whistleblower on the chain that's about blow the whistle, you could just ask them, has anyone, you know, filed any complaints? Have they, you could do due diligence to come to these issues. So to say now, six months down the road, how far we are away from that initial, you know, deal to say, oh, hey, hey, we just found out about this. And isn't this rude of Twitter not to have told us about this voluntarily when we

didn't negotiate for them to have to tell us about it? You know, she's, look, we're going to look very carefully at the terms of these things and this trial has not happened yet and it is moving incredibly fast but discovery is still going on behind the scenes, right? There'll be facts that come out at trial that could certainly change my opinion. I mean, they could change

anyone's opinion if you're being honest about looking at the case under the law. Right. But on the facts that we have now is it a bad look about how this, this much stuff came out? Sure, it doesn't it's not great. Right? You can't

I don't think you can deny that it's not great. However, does it matter under the law is a completely separate question that I don't think people are grappling with. And I don't think that under her view of the law or under the law itself, that absence of facts, there's no reason why it matters because he should have found out of, if it's material to him, if it's material to the company, then he should have found out about it before. Now, he would say you should have disclosed it in your SEC filings if it was material. Fair enough if it was material, but then there'll be a question of fact about that.

Question of law. It makes a question of law, in fact. Was this material? Are these concerns that Mudge had legitimate? Do they rise to the level of some material adverse effect? Or that's a whole other question under the law, but should they have been disclosed to the SEC? Was not disclosing them fraud in the inducement somehow of him signing this contract? I mean, that that would be a long game Twitter had been playing, you know,

since they filed their 2021 SEC filings, what, hoping, thinking that Musk might come along and make them an offer based on what they said. I mean, that doesn't really, you have to kind of read history backwards to think about that argument. But look, he has, he has colorable claims, and that's all, we don't know more than that now. But she is giving him every opportunity to argue everything that he has asked to argue thus far. So that being said, you know, if I'm Twitter's lawyers, okay, if it's just bots, all right, maybe I, you know, stick this one out. And, you know, I have a judge that seems to be in favor of no nonsense and making sure that deals that get signed close. But now I'm dealing with not only this potentially this bot issue, which may or may not be legit, but also would, you know, more credible.

claim. Let's just put it that way from this, from this whistleblower. And, you know, that stuff can go, like you mentioned, you know, in any way once you get to trial. Right. Most cases that come before the court, if I'm getting my stats correct, close. In fact, the vast majority, sorry, they settle. The vast majority of cases settle. Is there a world where Twitter's lawyers say, if I can basically say I want to take this to trial no matter what because I want the judge to force this to close or do they do you think there's like real temptation because of the uncertainty which we definitely have uncertainty now to to settle right a couple things on that so first of all you're absolutely right that most cases that come before the court settle right we don't go to trial on every thank God we don't go to trial on for ours my sanity we don't go to trial on every matter, not even close. However, you have to remember that this deal is in a unique posture. Most cases that are filed, the lawsuit comes after the thing happens, right? Here we're preemptively trying to, in this case, force something to happen. So this isn't like necessarily on all fours

with the vast majority of cases that we see. And this ties into the way that Twitter is in my opinion, unlikely to be really contemplating a settlement. I mean, there's all kinds of opinions on this. But you have to remember that there's legal liability at this point to Twitter's board of directors if they would try to engage in a settlement. Because they're shared, especially after tomorrow's vote, after tomorrow's vote, sorry, after yesterday's vote. Yeah, we're recording us, you know, ahead of the vote. Presuming that the vote that we passed the mark, which everyone is expecting that it did,

you know, then we're going to be in a situation where the board doesn't really have the could they settle the case? I think so. It's such a rare situation where we're involved as a court in this phase of things. It's kind of, it's slightly novel in a lot of ways. at least fairly uncommon. So the board is bound by its obligation to get the highest, well, to maximize shareholder value.

Arguably, that means get in a merger context, getting the highest price for those shares. So they don't really have like this unlimited authority to just decide that, well, in my estimation, the, you know, $50 a share would be a good cut against Musk and we can just settle this now like can they settle yes but there are all kinds of litigation consideration follow on litigation considerations that come up when they start thinking about settlement plus after the shareholder votes happen then you've got to think about you to write a new proxy you have to hold another vote how do there's so many complexities that an cc expert could could talk us through but it's not as simple as like does it seem like you know a good deal at this

point to just take the money and run or whatever. It's already gotten a lot more complex. So my in my perspective, the way that Twitter is litigating this case is it, look, they didn't even ask for any additional remedies in the complaint. They just said specific performance. They just said, make this deal happen. Look, he made an offer that was so far above market at the time. What else are you going to do, right? How can you legitimately say, how can you back off the gas pedal on pushing this deal forward when it was, I mean, it was, it was, it was, in some sense, it was a generous offer. Yeah.

And so it's like, you know, they don't have, they can't just say, yes, we can settle and then have no repercussions for that. There are real ramifications for them, if not in actual liability in the future, but for just the headache of having to deal with an endless, an endless set of shareholder lawsuits if they would decide to settle on terms that were. anything less than 5420 for sure right but also i mean what if they lose like they're in some deep trouble if they lose this one don't you think well yeah what if they lose the thing is that if they lose on the merits like if there's actually been some massive fraud going on at twitter

and it was all just like this whole thing has been some elaborate ploy to get this offer to entice musk to buy to make him sign a deal that was so seller friendly that that was so seller friendly that that he didn't get, they didn't have to tell him these things that were actually material. If all of those facts would align, then, I mean, yeah, the company is going to be in trouble no matter who owns it. And, but, but at this point, there's no evidence that that any of that is at all clear enough. And there's certainly no like vibe from the, the lawyers on Twitter side that they're doing anything other than going at this all the way to the finish line. And I, you know, I think the law is in their favor. Like I say, the bar for what a sophisticated actor should do when entering into a contract that is this friendly to the seller and this sort of disadvantageous to the buyer, look, he's like her quintessential billionaire, right?

I found a Twitter opinion that she wrote in January compelling Twitter to produce some anonymous user's data. And she actually cited Elon Musk as evidence for the fact that Twitter is an influential platform. She said, you know, when billionaires like Elon Musk tweet the market response, like she sees him as almost the quintessential kind of like, who has the most responsibility to enter into deals consciously, carefully, with incredible diligence with just like, who else but him has the responsibility to go to the ends of the earth to determine whether or not they want to enter into a contract for a 44, billion dollar purchase right if not him then who so uh he's not he's not he's not even close to the bar that that should have been set for him to to participate in this transaction responsibly yeah okay so you given all this your your thought is we're going to see this go to the end and we're probably going to see twitter win i mean from a very personal level i i hate to think through that because it's like oh my god that means we're actually going to go to trial in a month

And it is rare for a case like this to just full for, like this case has been unusual in every respect. It has put such an insane burden on the court. It has, you know, it has been unusual in every respect. But I, if I think about it, logically, I just, I don't see an off ramp at this point. What does trial look like? It's five days. It's a, it's a non-jury trial. one of the things about being a court of equity and not a court of law is that all trials in the court of chancery are non-jury trials, which has significant advantages in a lot of ways, especially for incredibly complex matters.

The judges are very specialized in their knowledge of corporate law and of the way that corporations work and the expectations of parties under mergers and acquisition agreements. so it's five days she has said she was at least in the initial hearings fairly clear that she really didn't think that more than five days was merited we do have this this issue now where we've got additional claims that are coming in with the whistleblower so we're yet to see whether she has any appetite for giving another day potentially to that I doubt it but it's possible that if if things really flesh out with this this termination agreement payments and all of that if there's if there's factual sort of they need to put witnesses on to talk about all of that and whether it was within the ordinary course then maybe but it's likely five days October 17th to 22nd it's mainly just witness after witness on the stand um it's not a law and order kind of trial really it's you know a judge who already uh knows what's what's at stake they know what the issues are. They know, you know, they're in the historical past of this court. There are

examples of former Chancellor Stryan actually interrogating witnesses himself. You know, it's different than what you might think of if you only know a normal or a Hollywood jury trial. It's certainly different than that. It's basically just putting facts into evidence through witnesses. And so you'll see Elon Musk. Well, we won't. I mean, there will only. not be video of this trial, as far as anyone can tell. There will be likely an audio feed um, hope fingers crossed for public access. Um, there will be media people there. It will be a circus at the courthouse. There will be a reporter from every single tiny publication on earth. Um, you know, the Solar City trial was a bit of a circus atmosphere. I mean,

this is a small port that is generally so stayed in its kind of manner and it's very quiet and you know it's more like a library than a boisterous kind of party vibe there so when these big trials happen they certainly have to to accommodate and they do and they will have like the media overflow room where all the media people can be and yeah there's already people talking about reserving their places in line with apparently there are services in New York City that people are looking at bringing to Wilmington to have people sit in line outside the court has to get in. So I don't know how sort of you see it's going to get, but I also know that the chancellor and all of the court stuff, they, they broke no nonsense

in terms of like, you know, shenanigans. So it'll be interesting. There'll be a court, what's it called like a sketch artist? There was a, for the solar city matter. There'll be a sketch artist there to draw more pictures of Elon. Just take care. All these people. There's this one old Tom Brady drawing in a courtroom that everyone always puts up whenever he loses. By the way, sorry.

Just speaking through this stuff, it is interesting because it seems like this is going to be a trial, you know, on the merits of the case with a no-nonsense chancellor. But it also like, it's clear to everybody involved that Elon. is just fishing for reasons to try to get out of this thing. So I guess this is like my last question on this stuff because I know we're at time. But how much does the fact that Elon is transparently fishing for any excuse to get out of this deal going to play into the judgment here? There was actually a couple of decisions recently that we reported out of one of the Delaware Superior Court and one out of the Court of Chancery where the Vice Chancellor Laster from the Court of Chancery decision was. specifically talking about, you know, shenanigans in the course of litigation.

And in the Superior Court, they were talking about these shifting grounds of arguments. And just, I guess, needless to say, it's not something that sets a good tone for the character of your star witness, right? The Vice-Chancellor Laster specifically said that basically whatever the party's litigation counsel does in the course of litigating the case,

he thinks it's completely fair to reflect that back upon their client. So if the counsel is constantly shifting their positions, then when that client gets on the stand in trial and tries to make a good faith argument about something, and he's basically like, look, I attribute litigation counsel's actions to their client. That's what lawyers do, right? They represent their clients.

So if you play shenanigans during the pendency of the trial, it's going to have an impact on how I hear the witness at trial and what kind of credibility I grant to what they say. And so I think it in various ways, it actually has some, like, it has legal import in actually some sort of theories of contract interpretation, the fact that he has these shifting grounds of termination. You know, like I say, he has an argument, but they didn't tell me. I just found out, you know, which is, again, okay, normally fair, but you could. Did you ask, you know, did you query about this when you had your $44 billion not on the dotted line yet? Right. You know, so I don't think that, I don't think it's going to play well.

I don't, I think you already see, and she's put out what, like 10, almost nine or 10 decisions in this case, in every single one, I think without exception, at least, let's say 70% of them. There is an explicit kind of sometimes gentle, sometimes not so gentle reprimand about how this case is being litigated by Musk. And that's just not something you ever want to be in the position of dealing with on your side of the case, right? You do not want the judge calling you out in opinion saying, this is suboptimal. This is something no sane person would ever ask for. This is, you know, these kinds, this kind of language is not, she isn't just sort of always sassy. on, right? She is very clearly sending a message to counsel, like, cut it out, right? Don't play these games because it's going to be detrimental to your client. And whether they stop playing those

games and whether those games continue into trial is going to have a real impact, I think, on how she views Musk's testimony. Now, whether or not Musk's testimony is actually relevant to legal issues in the case is sort of another question, because it just might not be that relevant. what he thinks about the deal. It's more what does the contract say and how do we interpret that in the facts of other witnesses. Mudge's testimony could potentially matter.

But Musk's testimony, like, it doesn't really matter that he wants out the deal really bad or that you don't feel like doing this anymore or that none of that stuff is like really legally relevant. So you could definitely say it's been not great in terms of like the, Will, how is she viewing the way that the case is being litigated for him? But also, does that end up mattering?

I mean, it really is going to depend on what the facts show at trial. And I think that no matter what, you know, as much as the Delaware court of transfer relies on parties to have integrity and to operate in good faith and as much as they admonish them to do so on a regular basis, in the end, it's always the facts and the law that matter. It's not, she's not going to decide this case based on some emotional wham or based on some dislike or like of Musk. She is going to decide this case. I am 100% certain on the facts and the law. And so, you know, we'll see what those are. Yeah. Do I have time for one more?

Sure. The other thing that people talk about in this case is that, you know, she could rule in favor of Twitter and Elon can say, no, I'm not doing it. Obviously, you've heard that one. What do you think about that? also, you know, what's the potential for appeal here? Like, what are the sort of, like, nah, uh, options that Elon has once she says you have to do this? Yeah, good question. So, um, in terms of, you know, there, there was a former, uh, chancellor and actually former former Supreme Court justice of Delaware, on the Delaware court that went on

Sanbc, I think, or somewhere early on and said, like, you know, this court is not going to want to rule on specific performance against Musk because courts are very concerned about, you know, enforcing their judgments and that the enforceability of their judgments is paramount to their authority. And so what would be too risky basically was the sort of takeaway that people took from the interview, which I think is slightly reductionist. But let's just say that's the takeaway that the court might be scared in some sense to rule on specific performance against Musk because they would be concerned about whether or not he would comply. Yeah, that was Carolyn Berger. Yeah.

Yeah, that's right. I'm here to tell you that I respect former Justice Berger deeply and she was a pioneer in many ways on both courts that she served on. I think she was speaking from a different era or I don't know, but I don't, I don't personally see it that way. I think that Chancellor McCormick is going to have no reservations about the enforceability of her judgment. They can, if Musk refuses to comply with an order of the court, he will be held in contempt. If he is held in contempt, he can be physically put in jail. I mean, you know, this is like, these are not things that ever happen, really, but they are things that can happen. And if you're going to flout the judgment of the court on a $44 billion deal, you are going to face consequences.

Look, his companies are incorporated in Delaware, his stock holdings are. in Delaware, those could be by various mechanisms taken forcibly, if necessary. He certainly has enough Tesla stock to cover this purchase price. I don't think that this is a factor in her judgment in any way. I think that she knows that there are mechanisms by which she can enforce her judgments. And I don't, I've never seen any evidence from her that her concern at this point would be to sort of cower in the face of a billionaire that is just not at all the vibe that I get from her. Right. And as we wrap, oh, sorry, go ahead. On appeal, there's a lot of questions on appeal and what the timeline is. And, you know, it's, it's a huge question. And it's, it's unprecedented in

many ways, this being one of them, like how long would the appeal take? Look, my big takeaway on appeal is that Chancellor McCormick made very clear in her last opinion or one of the five last opinions that even four weeks delay in this case is too great of a risk of irreparable harm to Twitter. That's a big statement for a judge to make. Four weeks is not that long of a time in like human time, right? In normal human, even in normal litigation time, four weeks is not an unseemly amount of delay for something. If she feels, and I think she's right to feel like at the whims of Elon Musk and his serendipitous behavior, his kind of, his kind of whimsical nature, right?

You can do a lot of damage being that kind of whimsy online if you're a billionaire. And so I think that the fact that she thinks that four weeks delay is too great of a risk of irreparable harm to justify the laying in a trial, I would be shocked if she had not communicated with the Supreme Court about the timeline for this appeal. Because she made very clear in the motion to exploit that she was basing her timeline around having the appeal. concluded by the outside financing date. So people that think that this is going to roll into 20, 23, June, July, I don't, I don't see that happening. I think that, look, the Supreme Court has a lot of laborious processes and procedures, and it's not used to operating on a super expedited basis. But when there are cases about things that matter on that kind of a timeline, they get them done.

When there are voting cases or government issue, they can get it done, right? And so I believe that I mean, I have no reason factually to believe this other than just logically. She was very clear about the reason she was setting the timeline as it was because she felt that that gave everything a substantial likelihood of being wrapped up within the outside financing date, which is in April. So to me, this does not go beyond there. She has worked it out. She is incredibly responsible.

She has sorted out the timelines such that it will work that way. I think it could happen sooner, honestly, on appeal, especially if it's just going to be a slip opinion of firmance and then maybe an opinion to follow. I don't think we're going to be, I don't see any way in which a lot of experienced other Delaware practitioners agree with me. No way this goes into the middle of next year. Okay. Well, look, if it does get enforced, then at least people can say that there's some one court

in the U.S. that seems to be, you know, it cares about what's written down on paper and enforcing the rules. Okay, as we wrap, if people are following this case, which they look for, if there's anything that like, you know, you can, if there are certain things that you see that you can sort of handicap it at home, I don't know, maybe that's unfair to ask, but what's Yeah, no, it's interesting because what's going to be really interesting about this next phase, so we're just like technically, if this were like a normal case, we do have a case schedule and we sort of arguably wrapped up regular discovery last week or so, but we know

that it's actually still ongoing because we see these disputes arising. We know that there's actually that we know that probably Elon hasn't been deposed yet. There's a lot of people speculating about Elon's deposition being a sort of, you know, in standard corporate litigation, there's a sort of like the CEO doesn't really feel like sitting down for deposition for a lot of reasons, including liability reasons. And so a lot of times cases will settle just before the CEO has to be deposed. I don't see that applying here in part because I think Elon truly believes that he isn't obligated to buy Twitter. If that's his position, then I think he kind of just believes it. I don't think he's scared of a deposition. I don't think he's really scared of very much. I think he's kind of got this

like, I don't know, bring it on kind of vibe if that's, if he's pushing this thing forward. I don't see his deposition being a catalyst in that sense. However, if he sits for his deposition And he says things off the cuff that are incredibly damaging. I think, you know, he has to be facing pressure from his attorneys to just close the deal. Just do the, just figure out the financing, just do the deal at 5420. Don't worry about pre-imposed judgment interest. Don't worry about the ire of this court. Don't worry about the cost of a trial.

Just agree to close the deal on its terms. Now, whether or not anyone can convince him to do anything that he doesn't want to do is an entire. separate question. But so you'll probably hear about the deposition, although we don't really get to know as the general public, like when it happens or when it's happening, or we don't have a lot of visibility into that, specifically unless a particular dispute arises around it.

But if it's anything like the rest of this case, we're entering expert discovery phase, which is where they hire experts to say, to render conclusions about factual matters and make arguments based on their experts. expertise, I suppose, will have competing experts on end-out calculations or on SEC filing truthfulness or on whistleblower issues, cybersecurity risks, things like that. We don't know who these experts are yet or what they'll be opining on, but we're probably likely to see a lot of

motions right before trial about, they're called motions eliminate to, they don't really do them in this court as much as in federal court because the judge can just kind of, the judge is the arbiter effect and law here. So he or she can just kind of like ignore things that aren't relevant, right? It's not the same as when you're sitting in front of a jury and you have to be careful what you say in front of the jury because the jury isn't as adept at like leaving that information out. But we might see some motions to disqualify an expert on the basis of a conflict or something like that. You know, there's if we see a motion to disqualify counsel, that would be huge. I think the window has passed for that. It seemed at some point like potentially

Musk was setting up a motion to disqualify Wachtel, which would be an absolutely undeniably massive representing Twitter, yeah. Yeah, that would be, I mean, no argument there. That would be a big friggin deal if that happens. But I don't think for many reasons that it's going to, but there's a motion that she's got under advisement on privilege waiver of Musk's Tesla and SpaceX emails. I think that's going to be an interesting opinion.

whether she waives, finds privilege waived on those emails, which I actually think under the law in Delaware she's likely to because he communicated with his lawyers on a matter that had nothing to do with SpaceX or Tesla on his SpaceX and Tesla email platforms. And for normal humans, since the board of directors and the directors and officers run the company, you don't just get to say, like, I'm Elon Musk, I have special privileges around here. That's not like a normal way of doing business as a Delaware corporation.

Not saying that's not how it's done it's SpaceX or at Tesla. But, you know, she's, I don't think she's going to be persuaded necessarily by the idea that Elon Musk is God internally. And so, therefore, he isn't in a different position than someone else would be using their work email to communicate. You're basically waiving privilege. You don't, your employer can read your emails. I mean, sorry to find it, but that's how it is working for the man, right?

Yeah. So that'll be an interesting one. We don't know if there's anything actually interesting in the underlying emails, but it's never a great thing for a party to have their emails with counsel have privilege waived on them and have them be produced. So that could be, it could be nothing. It could be something interesting. Okay.

Chance or daily, chance? Thank you for coming on. This was great. Thank you for bringing the appropriate nuance to a case with many different wrinkles. I feel like we could go on for three hours on this. We could for sure. But this has been so great. Before we sign off, can you just let folks know where they can find you again on Twitter?

And I know it's a pricey subscription, but if people find themselves interested in subscribing, where do you do that? Yeah, absolutely. So, I mean, like I say, we normally provide our services to litigators in the court of Chancery and other Delaware courts. So we have a particular model for our product. We're actually looking at now with all this interest in providing other lower cost products to people who are more just like lay interested in these kind of issues or even other lawyers in other fields who aren't necessarily corporate law focused, but who want a kind of view into this.

So just are the best place to follow us for all of that is on our Twitter. Twitter.com, chance rate underscore daily. and a link in bio for all the various ways you can subscribe or communicate with us. You can email us at Twitter at ChanceryDaily.com, and we'd love to hear from you. We get amazing. I mean, I just have to say the community that has developed around this account is like, it's priceless. It's pretty amazing. Yeah, it's like just these great people of all different, you know, people have very conflicting views on things.

And I really encourage people to come with a new on. perspective and I'm glad to be here with you to help share that mission. Yeah, yeah. I'm really glad we made it happen. Thanks again for coming on. I was really hoping we'd be able to get it done this weekend. Absolutely. Perfect timing.

So thanks again. All right, everybody. Well, that will do it for us here this week. Thanks again, a Chancery Daily for coming on. Thank you, Nate Gwattany, for editing the audio. Thank you, LinkedIn, for having me as part of your podcast network. Thanks again to all of you, the listeners, for being here coming back week. to week to listen to Tech Insiders, outside agitators, and, you know, very well-written folks

like Chance for day like we had today, I feel like, you know, for conversations like this year, there's really tough to find places with as much nuances as you have here. So thanks again for listening and to our guests. We'll be back next week with a new episode. We have Brandon Silverman. He's a really interesting guy. He sold his company crowd tangle to Facebook, which provided really needed transparency as to what was moving on the platform. And the rest is history. You know, you can no longer really access crowd tangle. Brandon will tell the full story.

And now he's advocating for more transparency inside social media company. So stay tuned for that. All right, that will do it for us here. And so we want to say thanks again for listening. Stay tuned, subscribe and rate. And we'll see you next time on the big technology podcast.