Elon Musk has dispatched a third letter to Twitter lawyer Vijaya Gadde, saying the social media’s $7.75 million severance payment to Peiter Zatko is enough reason to terminate his acquisition plan. Zatko was the former security chief turned whistleblower – he was fired in January after revealing that Twitter lacked proper privacy and security protocols, as well as lying about its bots and deleted users’ data.
In the letter dated September 9 and also filed with the SEC on Friday, Musk through his lawyers said the severance payment to Zatko violated the terms of his acquisition agreement with Twitter. Part of the agreement states that Twitter will not make any huge payments to anyone without Musk’s knowledge and approval; and Musk said he only learned of the $7.75 million payout to Zatko after Twitter filed it with the court.
“Twitter did not seek Defendants’ consent… before making this payment, nor was this payment disclosed to Defendants,” part of the letter read. “In fact, Defendants only learned of this payment when Twitter filed the separation agreement with the court on September 3, 2022.”
Musk first sent a letter to Twitter in July indicating that he wanted out of the deal. He said the social media giant lied that its bots and fake and spam user accounts were less than 5% of the total active users. He said the company did not give him access to verify these points in order to make an informed decision about his purchase intention. The company responded that this is not true and that complete access to Twitter’s fire-hose API containing every tweet was granted to the billionaire.
In August, Musk wrote a second letter and cited Zatko’s allegations as a considerable reason for quitting his plan to purchase Twitter. He subpoenaed Zatko to testify in the lawsuit filed against him (Musk) by Twitter, who said he must close the acquisition deal. The case was filed at the Delaware Court of Chancery and October 17 was set to hear the lawsuit. Musk would have wanted the hearing to commence in November, but the court disagreed.
Chancellor Kathaleen McCormick has ruled that Musk would be allowed to include Zatko’s reference as part of his evidence for the reason to vacate the acquisition. Twitter’s lawyers alleged that Musk wanted to abandon the deal because his personal net worth nosedived and Tesla’s stock price declined significantly. The lawyers even read out a text message that Musk alleged sent to a Morgan Stanley bank executive on May 8 in which he said he would abandon his acquisition plan out of fear of World War III.
“Let’s slow down just a few days,” Twitter’s lawyers said this is the content of Musk’s SMS. “Putin’s speech tomorrow is extremely important. It won’t make sense to buy Twitter if we’re heading into World War III.”
