Elon Musk and Twitter Inc have been sued by a Florida pension fund seeking to block the Telsa CEO from quickly completing his planned $44bn takeover of the platform.
In a complaint filed in Delaware Chancery Court on Friday, the Orlando Police Pension Fund said that under Delaware law Mr Musk cannot complete the takeover until at least 2025 unless holders of two-thirds of shares not “owned” by him approved, according to Reuters.
The lawsuit said Mr Musk became an “interested stockholder” after taking a more than 9 per cent Twitter stake, requiring the delay.
Mr Musk also runs electric car company Tesla Inc and is the world’s richest person, according to Forbes magazine.
Twitter and its board, including Chief Executive Parag Agrawal, are also named as defendants.
The lawsuit seeks to delay the merger’s closing until at least 2025, declare that Twitter directors breached their fiduciary duties, and recoup legal fees and costs.
Twitter declined to comment. A lawyer for Mr Musk did not immediately respond to a request for comment.
This isn’t the first time Mr Musk’s planned takeover has been targeted in court. Last month, a group of Twitter shareholders sued Mr Musk claiming that he failed to disclose his 9.2 per cent stake in the company in the proper timeframe.
Federal law requires investors to inform the Securities and Exchance Commission about stakes exceeding 5 percent within 10 days of the purchase.
According to the earlier suit, Mr Musk hit the 5 per cent milestone on 14 March and thus needed to alert the SEC by 24 March. However, he did not do so until 4 April.
Mr Musk’s motive in buying all shares in the company to take it private has been the subject of much speculation for weeks.
The eccentric CEO has said he wants to protect free speech and improve transparency on the platform.
Earlier this week he denied reports that the takeover is the result of conversations with Donald Trump, who was banned from Twitter following the 6 January 2021 Capitol riots.
Reuters contributed to this report
