Last Updated on 11/20/2022 by てんしょく飯
The acquisition of Twitter by Tesla Motors CEO Elon Musk is still causing quite a stir.
The “Defense” of Elon Musk
We were able to speak with John Quinn, general principal of the Quinn Emanuel Law Firm, who has been representing Mr. Musk for several years now.
Quinn Emanuel may not be familiar in Japan, but it is a global law firm specializing in litigation. The firm is known as one of the “Four Heavenly Kings of Terror” (the four most feared law firms in the world specializing in litigation), which has never been merged into another firm, even though mergers and acquisitions are not uncommon in the legal industry.
Mr. Quinn, a trial lawyer who has grown the firm to 31 offices around the world, including Tokyo, is often commented on in the major media as a “giant of the legal profession” in the United States.
In litigation familiar to the Japanese, Mr. Quinn has defended Ultraman against copyright infringement and tennis player Naomi Osaka, leading her to victory (see article “Naomi Osaka Wins Lawsuit! Lawsuit filed by former coach seeking 20% of lifetime winnings dismissed”). We interviewed Mr. Quinn, who visited Japan, at the Tokyo office.
Encounter” with Elon Musk
How did you first get involved with Mr. Musk?
My firm has represented Mr. Musk in litigation for several years now…Remember the incident in 2018 when a youth soccer team was lost in a cave in Thailand? At that time, Mr. Musk made headlines when he visited the site with a diving capsule to rescue the boys, and a British diver involved in the rescue effort criticized Mr. Musk for his actions, saying that he was ‘publicity stunts.
In response, Musk called the diver a “Pedo Guy” on Twitter. The diver sued Mr. Musk for damages, claiming that the comment was defamatory.
My firm represented Mr. Musk in this case and won the case.
After that case, Mr. Musk contacted my firm for another case in which he was sued by Twitter because we had defended him in several other cases.
Behind the Scenes of Twitter’s “Withdrawal of Acquisition
Why do you think Mr. Musk decided to acquire Twitter?
My firm specializes in litigation and we do not represent Mr. Musk in deals like acquisitions, so I don’t know exactly why, but I think he saw a lot of potential in Twitter and thought there needed to be more free speech. We suspect that he wanted to increase the value of the company through the acquisition and make Twitter more useful to people.”
In fact, Musk, who calls himself a “free speech absolutist,” has voiced his doubts about Twitter’s restrictions on free speech by controlling what is posted. In May of this year, he also expressed a willingness to unfreeze former President Trump’s account, which was frozen after the attacks on the Capitol. In April, Musk signed a hefty $44 billion acquisition deal with the ideal of making Twitter a place that provides freedom of speech. In July, however, he pulled out of that deal.
Why did Mr. Musk pull out of the deal?
Because I couldn’t get an answer to my question from Twitter. Mr. Musk asked questions about the number of bots, how they calculate the number of bots, how the company is managed, etc., but he did not get answers.
In this regard, Twitter says that Mr. Musk withdrew from the acquisition because “it is not in his personal interest” and because he is “concerned about the price. Indeed, the acquisition price of $44 billion was said to be too high considering Twitter’s market value.
Background checks, depositions…
On what grounds did Twitter sue Mr. Musk, and how did Mr. Musk respond to the lawsuit?
Mr. Musk gave notice that he wanted to withdraw the acquisition, and Twitter sued for breach of contract. Mr. Musk therefore counterclaimed on the grounds that Twitter falsified the number of bots and for fraud. We also included in the counterclaim motion issues of management and key personnel leaving Twitter after the contract was signed. Our New York office was doing background research and preparing depositions for this lawsuit in case it went to trial.”
However, Mr. Musk ultimately decided to acquire Twitter for the price he had originally signed up for. Some experts pointed out that he decided to buy the company because he could not win the lawsuit, but there may have been another reason for this.
What did Twitter offer Mr. Musk?
Twitter offered to discount the purchase price after suing Musk. Twitter offered a discount on the purchase price after suing Musk, and it was a huge discount. But in exchange for that discount, Twitter demanded two things from Musk.
First, they demanded a “golden parachute” for Twitter’s senior management. A “golden parachute” is a way to resign from a company for a huge payout upon dismissal. Second, Twitter has asked for a “release of claims. ‘ In other words, they demanded that Mr. Musk promise not to sue Twitter.”
All for the good of the ‘company.
But Mr. Musk said “no” to the offer. He didn’t want the money to go into management’s pockets. He also did not want to give up his billing rights. He wanted to protect his right to sue Twitter even after his contract was up.
Does this mean that Mr. Musk may sue in the future?
Right now, Mr. Musk owns Twitter. He can talk to people within the company and get all kinds of information from them. That information could support his case against former senior management and board members of Twitter. Although it is only speculation, we cannot rule out the possibility of a lawsuit against Twitter’s former senior management and board members. He could sue for misrepresentation of bot numbers, etc., and breach of fiduciary duty.
What do you mean by breach of fiduciary duty?
A breach of fiduciary duty is an act of not fulfilling a duty to the company for personal gain. A breach of fiduciary duty is an act of not fulfilling one’s duty to the company for one’s own personal benefit. In other words, it is an act of doing business with a company not for the benefit of the company, but for one’s own benefit. If you don’t fulfill your duty to a company in order to get money for yourself, then it is reasonable to assume that a ‘golden parachute’ could be a breach of fiduciary duty.
After Mr. Musk acquired Twitter, there has reportedly been an increase in tweets that amount to hate speech. According to one study, tweets using the N-word (a derogatory term referring to black people) increased by 1,300% on the first day of Mr. Musk’s acquisition.
Twitter is widening the “divide”…or is it?
GM, Audi, Volkswagen, and other automakers have suspended advertising, probably because engaging with Twitter, which has seen an increase in racist tweets, risks damaging their brand image and reputation.
Mr. Musk also called for voting Republican ahead of the midterm elections. Does that mean that such calls are also within the scope of free speech?
What do you think about the increase in hate speech after Mr. Musk took over Twitter, which advocates a free speech space?
What are your thoughts on the increase in hate speech? I think dangerous speech needs to be limited because social networking sites like Twitter are very influential, especially among young people. But if Twitter tries to limit discussion of a particular political agenda or viewpoint, that is not healthy. Even if it is a very unpopular and extreme political view, it should not be restricted. I think it’s very difficult to draw a line between what is and what is not restricted.
Social networking sites such as Twitter are said to be deepening the division in the United States.
Trump has ignited the division, but I think the division already started before Trump. I think it started during the Obama years and the George W. Bush years, and some people liked the Clintons and some disliked them. Hillary, obviously, was dividing America.
Richard Nixon, who started Watergate, was also incredibly divisive to the United States. The question is how to measure the degree of division. A society as polarized as the U.S. has lots of divisions and disagreements.”
The “future” of Twitter
People say we are more divided now, but what do you think? There has always been division and controversy. Dr. King and Robert Kennedy were assassinated. During the Vietnam War, students were shot and jailed for demonstrating; in the 60s and 70s there were riots and we were much more divided than we are now. There is no doubt about that. I think the reason the American people feel divided now is because they have forgotten what happened back then.”
After the acquisition, Musk, as well as the CEO and CFO, set out to transform Twitter by firing half of its 7,500 employees to cut costs and announcing a paid plan that earned a blue certification badge, which was quickly discontinued, but the media criticized “Musk’s actions are destroying the platform’s functionality and However, some in the media have criticized Musk’s actions, saying that he is destroying the platform’s functionality and reputation.
How do you think Musk will transform Twitter?
Mr. Musk is now the owner of Twitter, so it is not strange for him to fire people. He can pick people he trusts and put them in the right positions. He wants to change Twitter, so he wants to bring in new people who can make the changes he wants to make. Also, an acquirer wants to run a company with new ideas, and cost savings are a consideration. He just acquired Twitter. We’ll see how he transforms it.
Finally, I asked Mr. Quinn about Japan’s declining birthrate and aging population. In May, Mr. Musk caused a stir when he tweeted, “Unless there is a change in the birth rate to exceed the death rate, Japan will eventually cease to exist.
Will Japan “end”?
Quinn recalled a comment made by Lawrence Summers, who served as Secretary of the Treasury under the Clinton administration, at a lecture he gave in which he said, “Japan is a country that can replace the U.S. as the world’s leader.
Summers, speaking on the topic of which countries could replace the U.S. as world leader, likened Europe to a museum, Japan to a nursing home, and China to a prison. By making such an analogy, he argued that no country can replace the U.S. or the U.S. dollar.
Japan is a nursing home” is a metaphor for Japan’s aging society. However, Quinn says he still sees potential in Japan.
In the 1980s, books like “The Japan That Can Say ‘No'” and “Japan as No. 1″ sold well, and many Japanese came to Southern California to invest in real estate. Then came stagflation, but even so, Japan is still the world’s third largest economy. I think people have been predicting Japan’s decline for a long time, but it is still the third largest economy in the world. I think there is still a lot of potential.”
It seems that we will be able to keep an eye on Mr. Musk’s future moves even more closely.
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