A Delaware judge on Wednesday ruled that Elon Musk's legal team can include in its countersuit against Twitter new details alleged by a former executive-turned-whistleblower last month.
Judge Kathleen St. J. McCormick said in a Wednesday order Musk's legal team can amend its claims against Twitter given the allegations made by Twitter's former head of cybersecurity Peter Zatko. Zatko is better known by his hacker name "Mudge." Musk's team cannot do any kind of extensive additional discovery that will delay the case, with the judge only allowing "incremental" and "targeted" requests for more document production from Twitter.
That was all the judge decided in Musk's favor. She rejected the billionaire's request to delay the trial, his second attempt to do so, reiterating that any further delay poses an outsized risk to Twitter as a business.
"I previously rejected Defendants' arguments in response to Twitter's motion to expedite, making clear that the longer the delay until trial, the greater the risk of irreparable harm to Twitter," McCormick said in a Wednesday order. "I am convinced that even four weeks' delay would risk further harm to Twitter too great to justify."
She added that Twitter has already started to see negative effects due to the case, like increased employee attrition, as it's "been forced to manage under the constrains of a repudiated merger agreement."
The judge initially ruled in July that Twitter's lawsuit attempting to force Musk to close on his $44 billion agreement to acquire Twitter needed to be expedited, given the deal was set to close in late October and various financing agreements are contingent on that date. The five-day trial is set to take place in October.
A spokesperson for Twitter told Insider that the company looks "forward to presenting our case in Court beginning on October 17th and intend to close the transaction on the price and terms agreed upon with Mr. Musk."
"We are hopeful that winning the motion to amend takes us one step closer to the truth coming out in that courtroom," a lawyer for Musk, Alex Spiro of Quinn Emanuel Urquhart & Sullivan, said.
Last week, Musk said Zatko's revelations — which Twitter says are "riddled with inaccuracies" — give him even more reasons to walk away from his deal to buy the social network. Musk has already claimed that Twitter withheld information on "bots" or spam accounts on the platform, amounting to fraud and breach of contract. He first tried to walk away from the deal in July, but was trying to "slow down" the process of taking over Twitter as early as May,text messages revealed in court show.
Twitter sued Musk almost immediately, arguing Musk's true motivation for reneging on the deal is his the effect a downturn in the public financial markets had on his personal finances, which is largely tied up in stock of Tesla, where he is CEO.
While Zatko's whistleblower claims mainly revolve around security issues at Twitter, Musk seized on them to prove his allegations of fraud. Twitter holds that Zatko is little more than a disgruntled former employee and was fired for "ineffective leadership and poor performance." On Tuesday, the company's legal team said the cybersecurity chief never "had anything to do with spam" on the platform and accused Zatko of "parroting" Musk's allegations against the company.
Experts previously said the whistleblower's complaint is unlikely to sway the case. Though, it could convince the social media company to settle with Musk for a lower purchase price.
"It's certainly less than ideal for Twitter to have a former employee making claims like this now — and they raise Twitter's risk in a general sense," Matthew Schettenhelm, senior litigation analyst at Bloomberg Intelligence, told Insider. "But when you dive into the details, they don't give me a reason to think Musk has an edge in the Delaware case."
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