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    What if Musk loses the Twitter case but defies the court?

    AP – Twitter wants a Delaware court to order Elon Musk to buy the social media service for USD44 billion, as he promised back in April. But what if a judge makes that ruling and Musk balks?

    The Tesla billionaire’s reputation for dismissing government pronouncements has some worried that he might flout an unfavourable ruling of the Delaware Court of Chancery, known for its handling of high-profile business disputes.

    Musk hopes to win the case that’s headed for an October trial. He’s scheduled to be deposed by Twitter attorneys starting Thursday.

    But the consequences of him losing badly – either by an order of “specific performance” that forces him to complete the deal, or by walking away from Twitter but still coughing up a billion dollars or more for breach of contract – has raised concerns about how the Delaware court would enforce its final ruling.

    “The problem with specific performance, especially with Elon Musk, is that it’s unclear whether the order of the court would be obeyed,” retired Delaware Supreme Court Justice Carolyn Berger told CNBC in July. “And the courts in Delaware – courts all over – are very concerned about issuing a decision or issuing an order that then is ignored, flouted.”

    Berger, who was also a vice chancellor of the Chancery Court in the 1980s and 1990s, stood by those concerns in an interview with The Associated Press but said she doubted the Delaware institution would go so far as to make him complete the deal.

    Elon Musk speaks to the media. PHOTO: TECH CRUNCH

    “The court can impose sanctions and the court can kind of coerce Musk into taking over the company,” she said. “But why would the court do that when what really is at stake is money?”

    Berger said she expects Twitter to prevail, but said a less tumultuous remedy for the company and its shareholders would make Musk pay monetary damages. “The court doesn’t want to be in a position to step in and essentially run this company,” she said.

    Musk and his lawyers didn’t respond to requests for comment.

    Other legal observers said such defiance is almost impossible to imagine, even from a famously combative personality such as Musk.

    He acknowledged he might lose in August in explaining why he suddenly sold nearly USD7 billion worth of Tesla shares.

    “I take him at his word,” said an associate law professor at Tulane University Ann Lipton. “He wants to win. Maybe he’s got his own judgement as to what the odds are. But he’s also being sort of practical about this. He’s getting some cash ready so he doesn’t have to dump his Tesla shares if it turns out he is ordered to buy the company.”

    A ruling of specific performance could force Musk to pay up his USD33.5 billion personal stake in the deal; the price increases to USD44 billion with promised financing from backers such as Morgan Stanley.

    The Delaware court has powers to enforce its orders, and could appoint a receivership to seize some of Musk’s assets, namely Tesla stock, if he doesn’t comply, according to a law professor at Temple University Tom Lin.

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