EXPLAINER: Twitter, Musk and the Delaware Chancery Court

DOVER, Del. (AP) — Twitter’s lawsuit to force billionaire Elon Musk to make good on his promise to buy the social media giant will be resolved in a small but powerful Delaware court that specializes in high-stakes business disputes.

Twitter sued Musk in Delaware’s Court of Chancery in an effort to force him to complete a $44 billion takeover deal reached in April.

Lawyers on both sides are scheduled for their first hearing Tuesday before the court’s Chancellor Kathaleen St. Jude McCormick.

WHAT IS THE LAWSUIT ABOUT?

Musk, the world’s richest man, pledged to pay $54.20 a share for Twitter but now wants to back out of the agreement. He claims the company has failed to provide adequate information about the number of fake, or “spam bot,” Twitter accounts, and that it has breached its obligations under the deal by firing top managers and laying off a significant number of employees.

Twitter argues that Musk, CEO of electric car maker and solar energy company Tesla Inc., has operated in bad faith and is deliberately trying to tank the deal because market conditions have deteriorated and the acquisition no longer serves his interests. According to the lawsuit, the value of Musk’s shares in Tesla, which he was to draw upon to help finance the acquisition, has declined by more than $100 billion since November.

Either Musk or Twitter would be entitled to a $1 billion breakup fee if the other party is found responsible for the agreement failing. Twitter wants more, however, and is seeking a court order directing Musk to follow through with the deal.

WHEN DOES THE TRIAL START?

Twitter lawyers are asking the court to expedite the case. They have proposed a four-day trial starting Sept. 19.

WHAT IS THE COURT OF CHANCERY?

The Court of Chancery, established in 1792, traces its...