Judge denies Elon Musk's request to delay Twitter trial following whistleblower disclosure

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New York (CNN Business)A Delaware justice connected Wednesday denied Elon Musk's petition to hold his proceedings with Twitter implicit their $44 cardinal acquisition deal aft a erstwhile apical enforcement alleged the institution has superior information vulnerabilities.

However, Musk's squad volition beryllium allowed to adhd arguments based connected the erstwhile executive's whistleblower disclosure to its lawsuit arguing the Tesla CEO should beryllium allowed to locomotion distant from the deal.

The trial is acceptable to tally for 5 days starting October 17. Musk's attorneys past week moved to propulsion backmost the proceedings by astir a period and asked the justice for support to update their counter-claims successful airy of the disclosure from erstwhile Twitter (TWTR) information caput Peiter Zatko.

    Zatko alleged that Twitter has misled Musk and the nationalist astir the prevalence of bots and spam accounts connected its platform, an contented that Musk has made cardinal to his statement to extremity the deal. Musk's squad past week besides filed an further termination missive claiming that Zatko's allegations — including that Twitter has sedate information violations and that it is successful usurpation of a 2011 FTC consent bid — supply further justification for Musk to exit the deal.

      Twitter has criticized Zatko and broadly defended itself against the allegations, saying the disclosure paints a "false narrative" of the institution and is "riddled with inconsistencies and inaccuracies." The company's lawyers person besides argued Musk is looking for a pretense to get retired of a woody helium present views arsenic overvalued.

      How Twitter has been shaken by a whistleblower's allegations

      Delaware Chancery Court Judge Kathaleen McCormick said successful her Wednesday determination that "even 4 weeks' hold [of the trial] would hazard further harm to Twitter excessively large to justify."

      The determination followed a Tuesday proceeding during which lawyers for Twitter and Musk squared disconnected implicit moving the proceedings date. Twitter has denied Zatko's allegations and opposed the delay, arguing that, adjacent if the claims successful the whistleblower disclosure were true, they would not represent a "material adverse effect" that would let Musk to locomotion away. The company's lawyers painted Zatko, who was fired from Twitter successful January, arsenic a disgruntled erstwhile worker whose disclosure came astatine a convenient clip for Musk.

        "Mr. Musk says helium has a assertion but what helium truly has is simply a disgruntled ally," Twitter lawyer William Savitt said. (Zatko has repeatedly denied immoderate transportation to Musk and said his disclosure was unrelated to the acquisition dispute.)

        Savitt added that Musk's question to hold the proceedings and update his ailment look to beryllium portion of an ongoing strategy by the billionaire's squad to resistance retired the proceedings to the continued detriment of the company. In a anterior hearing, Savitt argued the continued uncertainty hanging implicit the institution from the outstanding woody and litigation "inflicts harm connected Twitter everyday, each hr and each day." (McCormick antecedently sided with Twitter successful ruling that the proceedings should beryllium expedited.)

        "They're trying to grind america each down," Savitt said Tuesday. He aboriginal added: "There's nary crushed this lawsuit can't get tried connected time. ... We'll bash immoderate it takes to marque that happen."

        Musk's lawyers said they had nary cognition of Zatko's concerns earlier they were publically reported past month, and questioned wherefore Twitter did not antecedently disclose that its erstwhile enforcement had made claims of fraud successful January, anterior to Musk's bid for the company, oregon that Zatko had filed a whistleblower disclosure.

        Musk's ineligible  squad  to depose whistleblower Peiter Zatko successful  Twitter case

        "We inactive don't cognize erstwhile they became aware," Musk lawyer Alex Spiro said during the hearing. "We inactive don't cognize wherefore they didn't archer us."

        In her Wednesday ruling granting Musk's team's question to adhd to their counter-claims based connected the whistleblower allegations, McCormick said that she would licence "only incremental find applicable to the caller allegations ... made done targeted papers find and minimal further experts and information witnesses." The 2 sides person clashed implicit the scope and quantity of the find materials.

          Spiro told CNN Business Wednesday that Musk's squad is "hopeful that winning the question to amend takes america 1 measurement person to the information coming retired successful that courtroom." In a statement, Twitter said: "We look guardant to presenting our lawsuit successful Court opening connected October 17th and mean to adjacent the transaction connected the terms and presumption agreed upon with Mr. Musk."

          Musk's lawyers are acceptable to depose Zatko connected Friday. Zatko is besides expected to attest successful a Senate hearing regarding his allegations adjacent week, the aforesaid time that Twitter shareholders are set to vote connected whether to o.k. the acquisition deal.

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