Elon Musk was just in court. He’s been in court before and is likely to be again both because he’s a litigious so and so and because he sort of thinks he shouldn’t have to follow laws and regulations he doesn’t like.
A couple of bits stood out in his recent testimony that I found particularly entertaining and enlightening and I think a thread about his legal trouble has the potential to be useful in the future, so here goes!
(This is not a thread for general speculation in Musk’s behavior putting him at risk for legal trouble. It’s for when the lawyers are already flying.)
So Musk is in court in Delaware because an investors in Tesla has sued … Tesla, I think, over Musk’s compensation package. Plaintiff’s lawyer (Varallo) brings in a few questions on other legal trouble Musk has and Musk shows how he thinks about having legal obligations he didn’t choose freely:
Musk also seemed to acknowledge that some of his tweets may have violated the terms of a consent agreement with the Securities and Exchange Commission. He defended them on the grounds that the agreement “was made under duress” and thus, in Musk’s opinion, “not valid.”
Poor Musk, the government bullied him into promising he’d follow rules and regulations! Plaintiff’s lawyer agrees this is ridiculous.
When Musk argued that the SEC consent decree was invalid, Varallo countered that while Musk appeared to have a fair grasp of some legal concepts, he has not been admitted to the Delaware Bar, and thus should confine his answers to the questions at hand rather than offering legal opinions.
The Post describes other exchanges that make it’s obvious Musk thinks this is a TV show trial:
On a couple of occasions, Musk objected to questions as “misleading” or too complex to answer with a yes or no. Varallo told Musk, “When your lawyer wants to make an objection, he has the right to do it. Sadly, you don’t.”
Sounds like Musk is heading down the path to Sovereign Citizen.
In that view, the government is nothing special; just another entity one can choose to contract with or not. And as the guy with the most money = power = freedom, he’s the most sovereign of all the sovereign citizens.
He also testified that he planned to reduce his time spent with Twitter and turn it over to someone else for day to day operation, which many folks seem to think is proof he knows he went too far and will bring someone else in to fix his mess.
It doesn’t seem like that to me, it sounds more like he plans on running Twitter the way he runs Tesla and SpaceX, where he mostly just makes decrees and has his flunkies carry out the day to day operations.
But what self-respecting executive would willingly take on the job of sweeping up the millions of jagged pieces that once used to be Twitter’s operations, debelopment, and business? And work for that guy? (“Step back” my ass. The ultimate in know-it-all control freak is congenitally incapable of “stepping back”, once he’s gotten this far. Tesla and SpaceX survived because grownups kept him away from the controls before it was too late.)
So… how is this different from somebody getting arrested for violating the terms of their parole and arguing that (since their options were either “accept the terms as offered” or “remain in prison for their entire sentence”) the parole agreement was made “under duress” and is “not valid”?
Yeah, he can afford to fringe his flags with real gold!
Once Twitter is a private company, I’m not sure how much teeth the SEC still has. An interesting question to be sure. And one I’m utterly unqualified to opine on.
You’d imagine Musks’ buyout legal team (not Twitter, Inc’s team), would have been pretty careful with the terms of whatever loans financed the Twitter buy. With the point being they’d try to make sure that no matter what happened, Elon would not be on the hook for any failures. Of course the bankers, Saudis, whoever, that bankrolled all this would have their legal teams trying to achieve the opposite: No matter what goes wrong, Elon’s still on the hook and we’ll get paid back.
Which leads me to wonder how what looks totally like active vandalism plays out legally versus his buyout creditors. And anyone else who had any meaningful stake in the expected future survival and profits of Twitter.
By “stake” I don’t mean like the content creators whose business will suffer from the lack of Twitter as a viable platform to promote their works through. More like somebody who owned a bond or convertible debt instrument or whatever. Someone with a legally enforceable right to a payout had Twitter progressed more or less normally as a business into the future.
If Twitter was still publicly traded, a bunch of shareholder derivative suits would already be in progress. Management has wide discretion but livestreaming yourself deliberately setting fire to your own corporate headquarters would be beyond the pale even in Delaware Chancery Court. Or so I would think.
So: assuming Musk does destroy Twitter, when, how, and with what do the e.g. Saudis get paid? Or don’t they?
I saw this morning that he has reinstated Trump’s account. If I had ever considered signing up for Twitter, that notion is now permanently off my to-do list.
Plaintiff’s lawyer agrees this is ridiculous.
