CNBC’s David Faber surprised his fellow panelists on Monday by asserting that Elon Musk’s upcoming legal battle with Twitter over their nixed $44 billion takeover agreement could result in jail time for the eccentric billionaire.
Faber made the bold claim during a discussion with fellow CNBC personalities Jim Cramer and Carl Quintanilla regarding Musk’s decision to walk away from the agreement due to concerns about spam bots within Twitter’s user base.
Cramer quipped that Twitter’s board was “in trouble” if their lawsuit only resulted in the company recouping a $1 billion breakup fee from Musk.
“There’s no way they’re going to take the walkaway fee,” Faber said. “They have specific performance in the contract. They are going to have a Delaware judge enforce that contract and say, these are the reasons why.”
“Then the question is, ok, you are forcing Mr. Musk to buy the company, does he actually agree to do it?” Faber added. “There is this argument being said lately that, well, maybe he won’t comply with that. Then we would have a situation where they could put him in jail.”
Faber’s remark, first reported on by Mediaite, drew surprised laughter from Quintanilla, who called the idea of Musk going to jail over the nixed deal “funny.”
“I know you laugh, but that’s where we could end up,” Faber said. “This is a man who doesn’t play by the rules.”
Nevertheless, it’s not the first time experts have speculated over the prospect of Musk landing in the slammer over the Twitter mess. In May, Columbia law professor John Coffee told Fox Business News’ Charlie Gasparino that even in a civil suit, Musk could be slapped with contempt of court charges that could lead to jail.
“Twitter can sue for an injunction ordering him to close,” Gasparino tweeted on May 18, noting that the law professor called it a “very unusual but plausible” scenario. “If he violated that injunction, he could go to jail for contempt until he complied.”
Over the weekend, Bloomberg columnist Matt Levine noted the possibility that Musk could refuse to buy Twitter even if a Delaware court orders him — but also appeared skeptical that jail was a possibility.
“What if the court orders Musk to close the deal and he says no? They’re not gonna put him in Chancery jail,” Levine wrote.