AP Business Writer
A Delaware judge on Tuesday ordered attorneys for billionaire Elon Musk to create a log of certain documents that relate to former Twitter security chief Peiter “Mudge” Zatko but not directly to Zatko’s whistleblower complaint against the social media giant.
The ruling came near the start of a three-hour hearing on various pretrial disputes between attorneys for Musk and Twitter over requested document disclosures. The two sides will face off in a trial scheduled to start Oct. 17 that will decide whether Twitter can force Musk to carry through with his agreed $44 billion acquisition of the company.
Scheduled depositions of Musk and Twitter CEO Parag Agrawal on Monday were postponed. Musk is now scheduled to be deposed in Delaware on Oct. 6 and Oct. 7, according to a Twitter court filing late Monday.
Musk, the world’s richest man, agreed in April to buy Twitter and take it private, offering $54.20 a share and vowing to loosen the company’s policing of content and to root out fake accounts. In July, Musk indicated that he wanted to back away from the deal, claiming Twitter had failed to provide him enough information about the number of fake accounts on its platform.
The hearing first focused on issues related to Twitter’s former security chief Peiter Zatko, who filed a whistleblower case against Twitter in July alleging a number of shortcomings in Twitter’s privacy and security procedures. Musk’s attorneys contend that Twitter needed his consent before paying Zatko $7.75 in severance but failed to do so.
Zatko’s complaint alleges a number of other problems at Twitter, including the allegation that CEO Parag Agrawal and other senior executives and board members have made false and misleading statements about Twitter’s cybersecurity, privacy and integrity.
Much of the rest of the hearing focused on arguments over discovery, the legal term for information exchanges between parties to a lawsuit. Musk lawyers complained that Twitter has withheld too many of the documents they requested, partly by claiming that they are confidential because they touch on attorney-client privilege.
Musk attorneys also claim that Twitter is improperly withholding information regarding various metrics on user engagement and how they affect the company’s financial performance.
Attorneys for Twitter, meanwhile, asked the judge to sanction Musk attorneys for failing to produce responsive phone messages between Musk and various confidantes. They also are asking Chancellor Kathaleen St. Jude McCormick to compel additional document production from certain Morgan Stanley entities that offered to help finance the deal and provided financial advice to Musk.
Jonathan Polkes, an attorney for Morgan Stanley and Co., said his client has already produced some 65,000 documents, far more than any other party in the case, including Musk and Twitter. The relative handful of other documents that Twitter wants are subject to redaction or withholding as legally privileged, he said.
Attorneys have been fighting incessantly over discovery ever since Twitter filed suit in July, seeking an order of “specific performance” directing Musk to carry through with the acquisition. The ongoing battle has tested the patience of McCormick, who has already issued more than a dozen rulings related to discovery disputes.
“Skip the rhetoric and go to the meat,” McCormick said tersely near the end of Tuesday’s hearing when an attorney for Musk began responding to a Twitter lawyer’s argument that the defendants should be sanctioned for withholding documents.