Musk says judge bias forced $44b Twitter deal

According to Bloomberg Law, Elon Musk testified at a San Francisco trial that he had to pay full price to buy Twitter Inc. in 2022 for US$44 billion because Kathaleen St. J. McCormick, chief judge of the Delaware Court of Chancery, was biased against him.

The jury is hearing claims by Twitter investors that Musk defrauded them by manipulating the platform’s share price to lower the purchase price. Musk said his 2022 tweets were “just speaking my mind” and downplayed their market impact.

Musk said his lawyers warned him he was unlikely to beat the suit after McCormick issued pretrial rulings favoring Twitter.

In a separate case, McCormick twice voided Musk’s Tesla Inc. pay package, which the Delaware Supreme Court reinstated in December 2025.

Her ruling prompted Musk to move Tesla’s incorporation to Texas. Other firms including Dropbox and TripAdvisor also left Delaware, which later passed legislation to protect its incorporation business by giving controlling shareholders more latitude.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Why a Delaware court put Musk’s ‘superstar’ status on trial

The fight over Musk’s pay package turned on a Delaware court calling him a “controlling shareholder,” even though he held about 21%–22% of Tesla’s voting power 1.
The court tied that label to his “outsized influence” and close relationships with Tesla directors, which triggered tougher review of the compensation plan 1.
Chancellor McCormick voided the package after finding an unfair process where Musk shaped terms and timing while the Tesla board did not bargain at arm’s length 1.
The ruling also found the shareholder vote was tainted because the proxy statement called the compensation committee independent and it did not clearly explain how the package came together, which Musk later cited as proof of bias 1.

Musk’s battle with Delaware is fueling a corporate exodus

After Musk urged companies to “Never incorporate your company in the state of Delaware,” more firms began their own “DExits,” shifting legal homes outside the state 2.
Dropbox and TripAdvisor changed where they are incorporated, while others have relocated or announced plans to relocate to Nevada and, in some cases, Texas 3.
These businesses say they want steadier, statute-driven rules, which signals concern about uncertainty in Delaware and how its courts handle controller disputes 3.
The shift threatens Delaware’s finances since incorporation fees made up about 22% of state revenue in 2024, which has pushed lawmakers to seek changes meant to keep companies 2.