"I cannot accept this evidence without a much better explanation of Mr. Bogatz’s path of reasoning," Wheelahan wrote.
Wheelahan emphasized that the Nevada merger law specifically stipulated that "all debts, liabilities, obligations and duties of the Company shall thenceforth remain with or be attached to, as the case may be, the Acquiror and may be enforced against it to the same extent as if it had incurred or contracted all such debts, liabilities, obligations, and duties." And Bogatz's testimony failed to "grapple with the significance" of this, Wheelahan said.
Overall, Wheelahan considered Bogatz's testimony on X's merger-acquired liabilities "strained," while deeming the government's US merger law expert Alexander Pyle to be "honest and ready to make appropriate concessions," even while some of his testimony was "not of assistance."
Luckily, it seemed that Wheelahan had no trouble drawing his own conclusion after analyzing Nevada's merger law.
"I find that a Nevada court would likely hold that the word 'liabilities'" in the merger law "is broad enough on its proper construction under Nevada law to encompass non-pecuniary liabilities, such as the obligation to respond to the reporting notice," Wheelahan wrote. "X Corp has therefore failed to show that it was not required to respond to the reporting notice."
Because X "failed on all its claims," the social media company must cover costs from the appeal, and X's costs in fighting the initial fine will seemingly only increase from here.
Fighting fine likely to more than double X costs
In a press release celebrating the ruling, eSafety Commissioner Julie Inman Grant criticized X's attempt to use the merger to avoid complying with Australia's Online Safety Act.