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On Friday, Twitter Inc and Tesla CEO Elon Musk were sued by a Florida pension fund seeking to block Musk from completing his $44 billion takeover of the social media platform before 2025.
In the proposed class action, the Orlando Police Pension Fund said Delaware law forbade a quick merger due to Musk’s agreements with other large Twitter shareholders, such as Twitter founder Jack Dorsey and his financial adviser Morgan Stanley.
The fund claims these agreements make Musk, who currently owns 9.6% of Twitter, the effective “owner” of more than 15% of the company’s shares. The fund said this requires delaying the merger by three years unless two-thirds of the shares not “owned” by Musk are granted approval.
The lawsuit also seeks to declare that the social media platform’s directors breached their fiduciary duties and seeks to recover legal fees and costs. However, the suit did not clarify how shareholders believed they might be harmed when the merger completes.
Musk is aiming to complete his takeover of Twitter later this year.
