- Elon Musk and Twitter's legal teams squared off in court for the first time on Tuesday.
- The Chancery Court granted Twitter its first request in its legal battle against Musk.
- The hearing addressed Twitter's request to expedite the case and get it resolved as soon as possible.
The Delaware Chancery Court granted Twitter its first request in its legal battle against Elon Musk — a step that could set up the company for future wins.
Kathaleen St. Jude McCormick, the judge or chancellor overseeing the case, ultimatley sided with Twitter at the end of the first hearing in its lawsuit against Elon Musk. Twitter asked the court to hear the case on an expedited basis in order to resolve the issue of whether Musk is able to back out of his $44 billion acquisition of the company, as he is attempting to do, before the end of October. McCormick agreed to do so, pointing to the "business risk" Twitter is currently exposed to. The case will now go to trial in October.
"The longer the merger transaction remains in limbo, the larger a cloud of uncertainty is cast over the company," McCormick said on Tuesday.
Her decision is in line with the arguments made by Twitter's lawyers. During the Tuesday hearing, Twitter's lawyer William Savitt claimed that Twitter was being harmed "every day" that the case goes unresolved. He accused Musk of attempting to "delay this trial to avoid a reckoning in hopes of wearing Twitter down, running down the clock and increasing his leverage."
Twitter last week asked for a speedy trial. Musk's legal team pushed back, arguing the scedule Twitter proposed was "onerous" and did not leave enough time for fact discovery and depositions. They asked that the case instead go to trial in February.
Experts have previously told Insider it would be in Twitter's best interest to resolve the court battle as soon as possible. University of Michigan Ross Business School Professor Erik Gordon previously said Musk could drag the court battle on for years and could attempt to appeal the case if he loses.
Since Musk agreed to buy the company, Twitter's stock has dropped about 40%. Experts told Insider that no matter the outcome of the court case, Twitter will face more lawsuits from shareholders in the coming months.