The judge overseeing Twitter Inc.’s $44 billion lawsuit against Elon Musk has a no-nonsense reputation as well as the distinction of being one of the few jurists to have ever ordered a reluctant buyer to close a US corporate merger.
Kathleen McCormick took the role of the chancellor or chief justice of the Court of Chancery last year, the first woman in that role. On Wednesday, she was handed a Twitter lawsuit that seeks to force Musk to complete her deal for the social media platform, which promises to be one of the biggest legal demonstrations in years.
Adam Badawi, a law professor specializing in corporate governance at the University of California, said, “She already has a track record of not keeping up with some of the worst behavior we see in these areas when people want to get out of deals. Huh.” Berkeley. “Se’s a serious, no-nonsense judge.”
In contrast to Musk’s flamboyant and volatile behavior, she is known to be soft-spoken, approachable, and thoughtful – but someone who stands her ground. She advocates for respect and honesty among litigants in legal conventions.
“We’ve always had each other’s backs, we always go out for drinks after an argument and maintain this level of civility,” she told a gathering at the University of Delaware this year.
After weeks of confrontational tweets suggesting Twitter was hiding the true number of fake accounts, Musk said on Friday that he was terminating the $54.20-per-Twitter share acquisition, which is valued at $44 billion. The social media platform sued on Tuesday.
According to legal experts and court records, judges have ordered reluctant buyers to close corporate takeovers only a few times. One of them was McCormick.
Last year, McCormick attracted the attention of Wall Street dealmakers by ordering an affiliate of private equity firm Kohlberg & Co. LLC to close its $550 million purchase of DecoPack Holding Inc., which makes cake decorating products.
She described her decision as “a winning pursuit for the certainty of the deal” and rejected Kohlberg’s arguments that it could go away due to a lack of financing.
There are many similarities with the Twitter deal in this regard. Like Musk, Kohlberg said he was walking away because DecoPack violated the merger agreement. Like Musk, Kohlberg argued that DecoPack failed to maintain normal operations.
There are differences as well. Musk’s deal is big, includes a publicly traded Target company on Twitter and could have implications for electric vehicle maker Tesla Inc., the source of much of Musk’s fortune.
In other cases, it sided with the shareholders when they clashed with the management.
Last month, she said Carvana Company shareholders could sue the board for a direct offering of stock to select investors at a time when the share price was depressed during the initial pandemic.
A graduate of Notre Dame Law School, McCormick began her career at the Delaware branch of the Legal Aid Society, which helps low-income people navigate the court system.
She went into private practice “primarily for financial reasons,” she told the Delaware Senate during her confirmation hearing, joining Young Conway Stargate & Taylor, one of the state’s main firms for business litigation.
She joined the Court of Chancery as Vice-Chancellor in 2018 and last year became the first woman to head the Court of Chancery.
Despite her gentle manner, Eric Talley, a specialist in corporate law at Columbia Law School, said he doubted McCormick would be feared by Musk.
“I would not place my bet on Chancellor McCormick, who suddenly became weak,” he said.
