Elon Musk quit Twitter Deal from his $44 billion Twitter Inc. Takeover will depend on a three-word phrase that's commonly used in failed mergers but rarely works with judges.

Musk's attorneys highlighted "Material Adverse Effect" in a regulatory filing Friday, arguing that secret information about bots on the social media site is "essential to Twitter's business and financial success."

Elon Musk’s attempt to walk away from his Twitter Deal

To avoid the deal, Musk must demonstrate that the claimed omission results in an "unanticipated, fundamental, permanent" unfavorable outcome, which is equivalent to ripping a hole in the transaction that cannot be repaired, according to Larry Hamermesh, a law professor at the University of Pennsylvania.

A Delaware judge defined the word in a 2020 case involving Boston Scientific Corp. as an "adverse development in the target's business that is important to the company's long-term earnings power over a reasonable time, which one would anticipate to be evaluated in years rather than months."

Delaware courts have only identified one instance

So far, Delaware courts have only identified one instance in which a clear MAE emerged: Fresenius SE's $4.3 billion takeover proposal for competitor pharmaceutical Akorn Inc. in 2018.

A judge backed Fresenius' decision to walk away from the agreement after discovering Akorn management suppressed a slew of issues that called into question the quality of data supporting several medicine approvals and the profitability of its operations.