Why Elon Musk Won't Be On Twitter's Board | A Fiduciary Duty Story (VL656)

Elon Musk has put his money where his mouth is, purchasing a substantial portion of Twitter's outstanding stock.

But with a rapid turnaround from acceptance to rejection of a seat on the Twitter board of directors following such purchase, what can we surmise about just what happened here? What of fiduciary duties? Is a hostile takeover imminent?

Who needs duties when you have money...in Virtual Legality?

CHECK OUT THE VIDEO AT: https://youtu.be/OPi60M-UZ1M

#ElonMusk #Twitter #Board

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CHAPTERS
00:00 Introduction
01:20 Offering a Seat at the Table
06:35 Board Membership Rejected
12:39 Understanding Fiduciary Duty
20:10 Rejecting Duties
28:54 Conclusion

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Discussed in this episode:

ARTICLES
"Elon Musk buys 9.2% stake in Twitter, making him the largest shareholder" - CNN.com (April 4, 2022)
https://www.cnn.com/2022/04/04/investing/elon-musk-twitter-shares-stake/index.html

"Musk backing off Twitter board opens door to hostile takeover" - CNBC (April 11, 2022)
https://www.cnbc.com/2022/04/11/musk-backing-off-twitter-board-opens-door-to-hostile-takeover.html

HOEG LAW VIDEOS
"Elon Musk Buys 9% of Twitter | Motivation: Free Speech...or Lulz? (VL653)" (April 4, 2022)
https://youtu.be/I-rYQiNasmU

SEC FILINGS
FORM 8-K - Twitter, Inc. (April 4, 2022)
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001418091/000119312522095651/d342257d8k.htm

SCHEDULE 13D - Elon Musk (April 4, 2022)
https://www.sec.gov/Archives/edgar/data/1418091/000110465922042863/tm2211757d1_sc13d.htm

AMENDMENT No. 1 to SCHEDULE 13D/A (April 9, 2022)
https://www.sec.gov/Archives/edgar/data/1418091/000110465922044481/tm2212422d1_sc13da.htm

TWEETS
"I’m excited to share..." - Padrag Agrawal (April 5, 2022)
https://twitter.com/paraga/status/1511320953598357505?s=20&t=vPJ6oI5RtjC3uaFJI8Ar3Q

"Looking forward to working with Parag & Twitter board..." - Elon Musk (April 5, 2022)
https://twitter.com/elonmusk/status/1511322655609303043

"Elon has decided not to join our board..." - Padrag Agrawal (April 11, 2022)
https://twitter.com/paraga/status/1513354622466867201

LAW AND LEGAL ANALYSIS
DGCL Section 141
https://delcode.delaware.gov/title8/c001/sc04/

"Social Responsibility and Enlightened Shareholder Primacy: Views from the Courtroom and Boardroom" - HLS Forum (February 21, 2019)
https://corpgov.law.harvard.edu/2019/02/21/social-responsibility-and-enlightened-shareholder-primacy-views-from-the-courtroom-and-boardroom/

"Directors’ Fiduciary Duties: Back to Delaware Law Basics" - Skadden (February 19, 2020)
https://www.skadden.com/insights/publications/2020/02/directors-fiduciary-duties

"DUTIES OF CONTROLLING STOCKHOLDERS" - Berchem, Deutsch & Houpt (June 2012)
https://www.akingump.com/a/web/22475/aohG6/duties-of-controlling-stockholders-pli_article_june-2012.pdf

"What are Board Observer Rights, and How Should They be Structured?" - Doida Crow Legal (June 17, 2020)
https://www.doidacrow.com/what-are-board-observer-rights-and-how-should-they-be-structured/

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"Virtual Legality" is a continuing series discussing the law, video games, software, and everything digital, hosted by Richard Hoeg, of the Hoeg Law Business Law Firm (Hoeg Law).

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DISCUSSION IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TO BE CONSTRUED AS LEGAL ADVICE. INDIVIDUALS INTERESTED IN THE LEGAL TOPICS DISCUSSED IN THIS VIDEO SHOULD CONSULT WITH THEIR OWN COUNSEL.

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Twitter: @hoeglaw
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