Photo: Elon Musk
U.S. District Judge Charles Breyer dismissed a proposed class-action lawsuit on Monday against Tesla CEO Elon Musk, over his acquisition of social media giant Twitter for $44 billion last year. The plaintiff, William Heresniak, had accused Musk of deceiving Twitter shareholders multiple times during the transaction, reports Reuters.
Judge Breyer ruled that Heresniak did not have standing to sue because his claims pertained to the circumstances surrounding Musk’s purchase of Twitter, not the fairness of the acquisition itself.
According to Breyer, Heresniak failed to demonstrate harm caused by Musk’s delayed revelation of a 9.2% stake in Twitter, which allegedly allowed him to buy more shares at lower prices prior to the public announcement of the buyout.
Additionally, the judge dismissed the allegation that Musk assisted his friends and former Twitter board members, Jack Dorsey and Egon Durban of Silver Lake, in breaching their fiduciary duties. He found no evidence that these individuals favored their own interests over their duties to Twitter.
Furthermore, Breyer stated that Dorsey’s decision to convert his roughly $1 billion worth of Twitter shares into equity in the new company did not unjustly take away money from other shareholders; instead, it merely reduced the amount Musk had to pay at closing.
Heresniak filed the lawsuit on May 25, 2022, a month after Twitter accepted Musk’s buyout offer at $54.20 per share. The deal was concluded on October 27.
Musk recently appointed former NBCUniversal advertising chief Linda Yaccarino as Twitter’s new CEO on May 12.