Elon Musk Twitter saga: What happened this past week and what's ahead?

Twitter is waging a legal battle against Tesla CEO Elon Musk following the billionaire's decision to terminate his $44 billion acquisition of the social media giant. 

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Fox Business recaps how Twitter and Musk got to this point and what lies ahead. 

July 8: Musk terminates Twitter deal

In a July 8 letter, Musk's lawyers said he would be abandoning the deal, claiming Twitter is "in material breach of multiple provisions" of the agreement and "appears to have made false and misleading representations" when it accepted Musk’s acquisition offer on April 25. 

The notice came as Musk and his legal team have been disputing Twitter's internal estimates that spam and fake accounts make up less than 5% of its users. 

In May, Musk tweeted that his team would conduct its own random sampling to calculate the number of spam and fake accounts. In response, Twitter CEO Parag Agrawal said an external review to determine the percentage would be difficult given the "critical need to use both public and private information." 

In June, Musk threatened to walk away from the deal after accusing Twitter of "actively resisting and thwarting" his right to information on the spam and fake account data. While the company later agreed to provide a "firehose" of internal data, the letter states that Musk was given "incomplete or unusable information."

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July 10: Twitter responds

In a July 10 response letter, Twitter's lawyers said Musk and his team's "purported termination" of the deal is "invalid and wrongful" and constitutes a "repudiation of their obligations under the agreement."

"Contrary to the assertions in your letter, Twitter has breached none of its obligations under the agreement, and Twitter has not suffered and is not likely to suffer a company material adverse effect," the letter states. "The purported termination is invalid for the independent reason that Mr. Musk and the other Musk Parties have knowingly, intentionally, willfully, and materially breached the agreement."

The company said it would continue to provide information reasonably requested by Musk under the agreement and take all measures required to close the transaction. 

"Twitter reserves all contractual, legal, and other rights, including its right to specifically enforce the Musk Parties’ obligations under the agreement," the letter concluded. 

TWITTER SAYS ATTRITION UP A BIT, COMPANYWIDE LAYOFFS NOT PLANNED AMID LEGAL BATTLE WITH ELON MUSK

July 11: Musk pokes Twitter

A day after Twitter's response letter, reports circulated that the company was preparing to sue. 

Musk tweeted out a meme on July 11 that included four photos of himself laughing with the captions "They said I couldn’t buy Twitter; Then they wouldn’t disclose bot info; Now they want to force me to buy Twitter in court; Now they have to disclose bot info in court."

Moments later, Musk tweeted another meme featuring actor Chuck Norris playing chess. 

"Chuckmate," Musk added.

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July 12: Twitter officially sues Musk

On July 12, Twitter officially filed a lawsuit against Musk in the Delaware Court of Chancery in an effort to force him to follow through on the deal. 

The complaint accuses Musk of refusing "to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests." 

"Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away," the lawsuit states.

In addition, the suit claims Musk repeatedly disparaged Twitter and the deal, creating business risk and downward pressure on its share price. Among the evidence cited in the suit was a poop emoji tweeted in response to Agrawal's thread on Twitter's bot review process. 

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What's next?

Columbia University law professor Eric Talley tells FOX Business that Twitter’s case looks "pretty strong on liability." 

"Most of Mr. Musk's offered reasons that he should be able to walk because Twitter misbehaved seem pretty pretextual, at least if one believes the ways they are put into the complaint," Talley says. "Moreover, he has yet to come forward with any convincing case that the bot account problem should overturn his obligation to close the deal."

Talley believes that there are three possible outcomes from the legal proceedings: 

• Twitter wins and gets an injunction requiring Musk to close the deal,
• Twitter wins but is instead awarded damages, or
• Musk succeeds in proving Twitter’s misbehavior allows him to walk away.

"The first seems most likely, but there will be some wrangling over whether an injunction is too complicated to oversee," he adds. "The second is the next most likely, and the third seems somewhat far-fetched with what we know now." 

Other options on the table include Musk reaching a settlement with Twitter that would allow him to walk away or the two parties renegotiating the deal at a lower price. 

"For some time, I have figured a repricing of the deal was the most likely settlement, but it increasingly appears that the relations between Mr. Musk and everyone in Twitter have become so poisonous that everyone may decide to quit if he takes the helm," Talley says. "That dynamic tips settlement negotiations more in the direction of Mr. Musk paying to walk away — possibly a lot."

Twitter told employees in an FAQ that it is difficult to predict how long the legal proceedings will be drawn out but that it remains focused on continuing to drive the business forward. 

The company acknowledged that it is not looking at company-wide layoffs during the process, but said its teams are "reprioritizing and making changes" to ensure it is operating responsibly and efficiently. 

"We may continue to see restructuring and org changes as we continue to align with our revised business needs (as we always have in the past)," Twitter added.

Though Twitter's attrition is "slightly higher than best practice for normal macroeconomic times", the company said it remains in line with current industry tends and that it will continue to monitor the situation to identify any areas of concerns and help mitigate where possible.