Billionaire Elon Musk has thwarted an attempt to ensnare him in a legal battle. U.S. District Judge Charles Breyer in San Francisco dismissed a lawsuit lodged against Musk by former Twitter shareholder, William Heresniak, establishing yet again that merit trumps baseless accusations in the judicial arena.
What was the basis of this dismissed lawsuit, you ask? Well, Heresniak, clearly disgruntled by the business maneuvers of Musk, tried to paint the Tesla and SpaceX CEO’s acquisition strategy of Twitter as suspicious. Reuters reports that the legal complaint didn’t present a shred of evidence demonstrating any harm stemming from Musk’s delayed disclosure of his 9.2% stake in Twitter. Nor did it convincingly argue about the so-called harm caused by the slight delay in the completion of the sale. Instead, the lawsuit seemed more interested in casting aspersions on Musk’s strategic decisions than addressing any genuine unfairness in the transaction.
As reported by Yahoo, the suit, which aimed to be granted class-action status, alleged that Musk’s delayed disclosure of his Twitter stock purchases resulted in a loss of $156 million for Heresniak and other shareholders. This accusation seems rich, coming just a month after Twitter had accepted Musk’s buyout offer in April 2022. Let’s not forget, the transaction was wrapped up by October, just one and a half months behind schedule.
But Heresniak isn’t alone in this quest to pin the blame on Musk. Another suit by a former Twitter shareholder targets Musk for waiting to announce that he had acquired more than 5% of Twitter’s shares. The suit asserts that this delay allowed Musk to manipulate the stock price while building his stake before striking the buyout deal, quite a stretch of the imagination if you ask me.
Furthermore, the case led by Heresniak suggested that Musk’s supposed cronies, Twitter’s co-founder and former CEO Jack Dorsey and Silver Lake private equity managing partner Egon Durban, breached their fiduciary duties. The allegation implies that they acted for their own benefit and Musk’s, an accusation that Judge Breyer dismissed for lack of proof, as per Reuters‘ coverage.
The court found Dorsey’s decision to convert his roughly $1 billion in Twitter shares into equity in the new company did nothing more than reduce the amount Musk had to pay to finalize the deal. It certainly did not unfairly syphon off funds from other shareholders as Heresniak claimed.
Judge Breyer’s filing dated March 3 refers to Heresniak’s allegations as “a disjointed assortment of grievances against Elon Musk, many of which are irrelevant.” It’s interesting to note that these claims surfaced a month after Twitter accepted Musk’s generous offer of $54.20 per share, leading one to wonder about Heresniak’s motives.
Since this transition, Twitter has been grappling with sustaining its ad revenue, a common struggle among social media platforms. Earlier in May, Musk announced his plan to appoint Linda Yaccarino as Twitter’s new CEO, signaling a new direction for the company. It’s about time we celebrate innovators and entrepreneurs like Musk instead of miring them in baseless lawsuits.