Elon Musk has failed in an attempt to delay a trial over his termination of a $44bn (£38bn) deal to buy Twitter.
A judge ruled on Wednesday that the case would go ahead in Delaware from 17 October after deciding that Musk’s request to push it into November would damage Twitter’s business.
The social media company is suing Musk over his decision to walk away from the transaction and is demanding that he complete the deal on the agreed terms.
“I am convinced that even four weeks’ delay would risk further harm to Twitter,” wrote Kathaleen McCormick, of Delaware’s court of chancery, affirming that the trial would start next month.
However, McCormick ruled that Musk’s countersuit against Twitter, to be heard at the same time, could be expanded to include allegations from the whistleblower Peiter “Mudge” Zatko.
Zatko, a former head of security at Twitter, said in a complaint that the company was “grossly negligent in several areas of information security”. He also alleged that Twitter lied to Musk about bot accounts – one of the key tenets of his argument for scrapping the deal.
“We are hopeful that winning the motion to amend takes us one step closer to the truth coming out in that courtroom,” said Alex Spiro, an attorney for Musk.
Musk’s legal team had argued in Delaware on Tuesday that justice demanded delaying the five-day trial so that Musk could investigate the claims by Zatko. Musk has argued that Zatko’s allegations constitute a “company material adverse effect” that substantially altered the business’s value and therefore rendered the deal invalid.
“We look forward to presenting our case in court beginning on October 17 and intend to close the transaction on the price and terms agreed upon with Mr Musk,” said a Twitter spokesperson. Twitter said last month that Zatko’s statements were “riddled with inconsistencies and inaccuracies and lack important context”.
In July Twitter sued Musk, who is also chief executive of the electric vehicle maker Tesla, to hold him to his April agreement to buy the company for $54.20 a share. The company has alleged that Musk got cold feet over the deal as global markets turned soon after the deal was signed.
Brian Quinn, a professor at Boston College law school, said Wednesday’s ruling was a “huge loss” for Musk. “Not only does he now have to account for the additional issues he raised with respect to Zatko, he won’t get additional time to prepare.”
At Tuesday’s hearing, Twitter’s lawyer read a message from Musk that came to light during the litigation that the lawyer said showed the billionaire was not actually concerned about spam accounts.
Musk sent a message to a Morgan Stanley banker in May – as Russia’s president, Vladimir Putin, was warning the west over his country’s war in Ukraine – that read: “It won’t make sense to buy Twitter if we’re heading into World War III.”