In a decision on Monday, US District Judge Charles Breyer in
San Francisco said plaintiff William Heresniak lacked standing to sue because
he challenged "wrongs associated with" Musk's buyout, not the
fairness of the buyout itself.
Breyer said Heresniak did not show harm from Musk's belated
disclosure of a 9.2 percent Twitter stake, which the suit said let him buy more
shares at lower prices before the buyout was announced, or from the closing's
taking place 1 1/2 months later than planned.
The judge also found no proof that Musk helped two friends
then on Twitter's board, co-founder Jack Dorsey and Silver Lake private equity
firm managing partner Egon Durban, breach their fiduciary duties by favoring
their own and Musk's interests.
Breyer said letting Dorsey roll over his approximately $1
billion of Twitter shares into an equity stake in the new company merely
reduced how much Musk had to pay at closing, and did not "improperly
divert" money from other shareholders.
Heresniak's lawyers did not immediately respond to requests
for comment outside of business hours.
Musk also runs the electric car company Tesla and is the
world's second-richest person, according to Forbes magazine.
Lawyers for Musk, two of his holding companies, and Twitter
did not immediately respond to requests for comment.
In a March 3 court filing, they called Heresniak's claims
"a disjointed laundry list of - often irrelevant - grievances against Elon
Musk."
Heresniak sued on May 25, 2022, one month after Twitter
accepted Musk's $54.20 per share buyout offer. The transaction closed on
October 27.
Twitter has since struggled to maintain ad revenue, with
some advertisers expressing concern that loosened content rules could leave
their ads associated with hate speech or other "wrong messages."
On May 12, Musk named former NBCUniversal advertising chief
Linda Yaccarino as Twitter's new chief executive.
The case is Heresniak v Musk et al, US District Court,
Northern District of California, No. 22-03074. © Reuters