July 15 (Reuters) – The judge overseeing Twitter Inc.’s $ 44 billion (TWTR.N) lawsuit against Elon Musk has a nonsensical reputation as well as the distinction of being one of the few jurists he has ever ordered a reluctant buyer to close a U.S. Corporate Merger.
Kathaleen McCormick took over as Chancellor or Chief Justice of the Chancellery Court last year, the first woman in that position. On Wednesday, he was assigned the Twitter lawsuit that seeks to force Musk to complete his deal for the social media platform, which promises to be one of the biggest legal clashes in years.
“She already has a history of not enduring some of the worst behaviors we see in these areas when people want to get out of offers,” said Adam Badawi, a law professor specializing in corporate governance at the University of California. Berkeley. “She’s a serious, pointless judge.”
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In contrast to Musk’s cheeky and volatile behavior, she is known as soft, approachable, and friendly speech, but a person who also stays on her ground. He advocates for respect among litigants and integrity in legal conferences.
“We’ve always turned our backs, we’ve always gone out for a drink after discussions, and we’ve maintained that level of civility,” he said at a meeting at the University of Delaware this year.
After weeks of confrontational tweets suggesting that Twitter was hiding the actual number of fake accounts, Musk said on July 8 that he was completing the $ 54.20 acquisition of shares on Twitter, worth $ 44 billion. On Tuesday, the social media platform sued. Read more
McCormick scheduled the first hearing for Friday, July 19 in Wilmington, when he will consider Twitter’s request to expedite the case and hold a four-day trial in September.
Judges have ordered reluctant buyers to close corporate acquisitions only a handful of times, according to legal experts and court records. One of them was McCormick.
Last year, McCormick caught the attention of Wall Street negotiators by ordering a subsidiary of private equity firm Kohlberg & Co LLC to close its $ 550 million purchase of DecoPac Holding Inc., which manufactures decorative products. of cakes.
He described his ruling as “a victory for the certainty of the deal” and rejected Kohlberg’s arguments that he could leave for lack of funding.
The case has many parallels with the Twitter deal. Like Musk, Kohlberg said he was leaving because DecoPac violated the merger agreement. Like Musk, Kohlberg argued in part that DecoPac did not maintain ordinary operations.
There are also differences. Musk’s deal is much bigger, involves a target company listed on Twitter on the stock market and could have implications for Tesla Inc., the electric vehicle maker that is the source of much of Musk’s fortune.
In other cases, he has sided with shareholders when they clashed with management.
Last year, he prevented energy company The Williams Cos Inc from taking an anti-acquisition measure of the so-called poison pill, saying it was failing in its fiduciary duty to shareholders.
Last month, he said Carvana Co (CVNA.N) shareholders could sue the board to offer a direct offer of shares to select investors when the share price falls during the early pandemic.
A graduate of Notre Dame Law School, McCormick began her career in the Delaware branch of the Legal Aid Society, which helps low-income people navigate the judicial system.
He went into private practice “primarily for financial reasons,” he told the Delaware Senate during his confirmation hearing, joining Young Conaway Stargatt & Taylor, one of the state’s leading companies for business litigation.
She joined the Chancellery Court in 2018 as vice-chancellor and last year became the first woman to head the Chancellery Court.
Despite his gentle manner, Eric Talley, who specializes in corporate law at Columbia Law School, said he doubts McCormick would be intimidated by Musk.
“I wouldn’t bet that Chancellor McCormick would suddenly weaken,” he said.
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Report by Tom Hals in Wilmington, Delaware and Hyun Joo Jin in San Francisco; edition by Noeleen Walder and Jonathan Oatis
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Tom Hals
Thomson Reuters
Award-winning reporter covering U.S. courts and law from the COVID-19 pandemic to high-profile criminal trials and major Wall Street failures with more than two decades of experience in international financial news at Asia and Europe.