As the old saying goes — the job’s not over until the paperwork is done. And so far, the paperwork to end the legal fight between Twitter and Elon Musk has yet to appear, let alone conclude matters. Late yesterday, the judge in the case of Twitter v Musk sent letters to both sides instructing them that as far as she was concerned, it’s still game on:

Twitter, Inc. v. Elon R. Musk, one of the most famous cases ever to wander into the great state of Delaware, may get its day in court after all. Despite Tuesday’s bombshell news that Elon Musk was willing to buy the social media giant for his original offer price, neither Musk nor Twitter have seen fit to take any legal steps to stop the trial scheduled to begin on Oct. 17. …

Chancellor Kathaleen McCormick with the Delaware Chancery Court sent the parties a ruling in a letter Wednesday that made clear the game was still on until somebody actually did something to legally hit the brakes.

“Dear Counsel,” she wrote. “The parties have not filed a stipulation to stay this action, nor has any party moved for a stay. I, therefore, continue to press on toward our trial set to begin on October 17, 2022.”

The remainder of the 12-page document dealt with several ongoing discovery disputes between the parties, rejecting a request from Twitter to impose sanctions against Musk for some minor and already-resolved or soon-to-be-resolved deficiencies, ordering additional production of evidence from Musk regarding Signal messages he reportedly sent, and reserving ruling on messages that were deleted during a time it was “unclear” Musk was under a duty to preserve evidence.

Mediaite’s Sarah Rumpf has the letter embedded at the link. She also includes this reminder from QZ’s Scott Nover that Musk has a particularly important entry on his Google calendar today, too:

Tick tock, tick tock. (Not TikTok, however.)

So what’s the hold-up? The Wall Street Journal reports this morning that both sides are still haggling over the details, and particularly those involving the end of the litigation. However, Twitter has apparently agreed to push off the deposition already. And it may be that Musk still wants to negotiate a new purchase price:

As of late Wednesday, representatives of Mr. Musk and Twitter were trying to hash out the details of his proposal this week to stick to that original agreement, the people familiar with the matter said. Sticking points include what would be required from both sides for litigation over the stalled deal to be dropped and whether the deal’s closing would be contingent on Mr. Musk’s receiving the necessary debt financing, some of the people said.

There was initially hope a deal could be reached Tuesday or Wednesday, averting a trial scheduled to start Oct. 17, the people said. The two sides have agreed to delay Mr. Musk’s deposition, which was scheduled to begin Thursday in Texas, some of the people said, to continue efforts to reach agreement on how to move forward. …

Legal experts have maintained from the beginning that Twitter appeared to have the stronger case, in part because Mr. Musk waived due diligence before agreeing to the deal and the merger agreement gave Twitter the right to sue him to follow through with it under a concept called “specific performance.”

Still, even a small risk of Mr. Musk’s prevailing in a trial could be too much for a company the size of Twitter to bear. For this reason, the majority of broken deal cases end in negotiated settlements, often with a small price cut. Such was the case with litigation between LVMH Moët Hennessy Louis Vuitton SE and Tiffany & Co. in 2020. Those parties agreed to a nearly 3% price cut to avert a trial.

A 3% price cut may not sound like much, but in this stratospheric number regions, it would be a big deal. It would shave about $1.32 billion off of the total purchase price for Musk and drop the share price sale closer to $52.50 rather than $54.20 — enough to annoy larger shareholders, anyway. Given Twitter’s performance of late, however, that’s way above a rational valuation — and a 3% haircut may be chump change in that sense for those shareholders, considering the alternative of being stuck with Twitter stock after a failed buyout.

At any rate, it probably won’t come to that. Musk is pretty much stuck with this deal, and he likely knows it by now. Expect the paperwork to get finished soon — or at least before the October 17 trial date. Until then, we can enjoy the media freakout at leisure.

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