The world’s richest man, Elon Musk, claimed that Twitter Inc.’s decision to pay millions of dollars to a whistleblower it had sacked provides him with yet more reason to renegotiate his $44 billion purchase agreement for the social media business.
Lawyers for Musk said in a letter addressed to Twitter on Friday that the company had broken the terms of the merger agreement by not getting his permission before paying Peiter Zatko and his attorneys $7.75 million. The merger deal placed limitations on when Twitter may make such payments.
The letter stated that since the payment, which included $7 million for Zatko, “cannot be cured,” Musk is “not compelled” to complete the acquisition. The U.S. Securities and Exchange Commission received a copy.
A request for comment from Twitter did not immediately receive a response.
It has declared its dedication to seeing the transaction through to completion, which requires Musk to pay $54.20 per share for the San Francisco-based business. The price of Twitter stock on Friday was $42.19.
Before being let go in January, Zatko, often known as Mudge, served as Twitter’s senior security executive.
Later, he claimed that Twitter had misled both regulators and the public about its security procedures and approach to battling spam and hackers.
According to Musk’s attorneys, Twitter and Zatko reached a separation agreement on June 28 that included the severance payment.
Ten days later, Musk, who is also the CEO of the electric vehicle manufacturer Tesla Inc., declared the merger null and void, accusing Twitter of exaggerating the prevalence of spam or bot accounts on its network.
Twitter disputed Musk’s statements and sued him to hold him accountable for the deal, claiming he had changed his mind as market jitters were caused by geopolitical tensions and rising prices.
According to court documents, Musk later countersued Twitter and on Friday updated his case to include Zatko’s allegations.
The first day of a trial in Delaware Chancery Court is set for October 17.
