Twitter subpoenas Elon Musk's associates as legal battle heats up

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New York (CNN Business)Twitter has subpoenaed a fig of Elon Musk's associates, according to tribunal filings and nationalist statements, arsenic the institution moves guardant with its ineligible combat against the Tesla billionaire implicit his effort to terminate their $44 cardinal acquisition deal.

The database of those who person received subpoenas includes respective salient concern firms and task capitalists, immoderate of whom are portion of the alleged PayPal mafia, a radical of influential figures successful the tech manufacture who worked astatine the outgo institution cofounded by Musk.

Judge orders October proceedings  for suit  betwixt  Elon Musk and Twitter

According to a tribunal filing, Twitter sent a subpoena to Founders Fund, a San Francisco-based VC steadfast established by Peter Thiel, the arguable billionaire who was besides a cofounder astatine PayPal. Twitter is besides said to person sent subpoenas to investors Joe Lonsdale and David Sacks, according to tweets from some individuals.

    Lonsdale, a cofounder of Palantir and erstwhile PayPal employee, claimed successful a tweet this week that his subpoena is portion of a "giant harassing sportfishing expedition." Sacks, a erstwhile PayPal exec and laminitis of Yammer, responded to the subpoena by tweeting a mag screen with an representation of a mediate digit connected it.

      Twitter declined to remark for this story.

      Musk moved to terminate the acquisition statement last month, alleging that Twitter breached the woody by failing to manus implicit information helium says helium needs to evaluate the fig of bots and spam accounts connected the platform. Days later, Twitter sued Musk to unit him to travel done with the deal.

      A five-day proceedings is acceptable to statesman successful Delaware connected October 17 aft Twitter pushed for an expedited process.

        By sending retired subpoenas to investors and associates of Musk, Twitter could beryllium trying to find erstwhile the Tesla CEO decided to backmost retired of the woody and his motive successful doing so.

        "They're trying to verify his story," Charles Elson, founding manager of Weinberg Center for Corporate Governance astatine the University of Delaware, told CNN Business. "Was helium truly misled? Was helium not? Was this a strategy, oregon was this a genuine interest astir what they had told him oregon didn't archer him?"

        Some analysts person suggested that Musk is utilizing the bot mentation arsenic an excuse to get retired of a woody that present seems overpriced pursuing the downturn successful Twitter shares and the wide tech market. Tesla shares, which Musk is relying connected successful portion to concern the deal, besides declined aft helium agreed to the acquisition. (A lawyer for Musk has antecedently called that proposition "nonsense.")

        Prior to moving to terminate the deal, Musk had lined up financing for the acquisition, including indebtedness committedness letters from Morgan Stanley and different unnamed fiscal institutions arsenic good arsenic billions successful equity financing from assorted tech concern firms.

        According to a tribunal filing, Twitter sent a subpoena to AH Capital Investments, a money from Andreessen Horowitz, which was among the firms listed arsenic agreeing to supply equity financing for the deal.

          Founders Fund and AH Capital Investments were not disposable for contiguous comment.

          Twitter besides sent subpoenas to 2 of Musk's companies, Tesla and SpaceX, according to tribunal filings.

          Clare Duffy contributed to this report.

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