June 18, 2024


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Elon Musk is suing the law firm that forced him to buy Twitter

Elon Musk is suing the law firm that forced him to buy Twitter

In 2022, the law firm of Wachtell, Lipton, Rosen & Katz represented Twitter in a high-profile photo Legal dispute with Elon MuskWho was he You try to back off An agreement to buy the social media company. Nine months later, Twitter — now run by a vengeful catcher — is suing Wachtell.

according to suitfiled before the California Supreme Court, Wachtell’s lawyers persuaded former Twitter management to agree to pay a “success fee” if Musk closed the deal — part of the $90 million in fees the law firm allegedly arranged in the days leading up to the sale.

According to attorneys for X Corp. Inc., Twitter’s new parent company under Musk’s ownership, “took advantage of a corporate client left unprotected by lame duck confidants who had lost their motivation to work for Twitter pending its imminent sale to Elon Musk”.

Why Musk had to follow through and buy Twitter

After Musk signed a deal to buy Twitter at $54.20 a share, he tried it get away with it. But Musk wasn’t in great shape. In the merger documents, he agreed to “specific performance– legal word meaning that withdrawing from the deal may result not only in civil penalties but in a judge forcing him to complete the deal and take control of Twitter.

staring down Uphill battle At a Delaware court trial, Musk finally relented Close the deal To buy Twitter on October 27, 2022.

Turn on the legal tab in Twitter?

Musk’s lawyers are basically claiming that Wachtell pulled a quick one on Twitter — and that the departing executives were more than happy to roll around, doling out millions to Wachtell, and proving ownership of the company, soon to be under Musk’s ownership, with a hefty legal bill.

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The complaint alleges that Wachtell was “at the center of a spending spree by departing Twitter executives who have raised a tab on Twitter by, among other things, facilitating the improper payment of large gifts to favored law firms like Wachtell on top of corporate “full hourly bills.” By allocating tens of millions of dollars in handouts to companies as a ‘success’ or ‘project’ fee.”

Neither Wachtell nor William Savitt, the attorney named in the complaint, responded to a request for comment. Twitter does not have a contacts section executives there No further comment can be reached.

Musk’s financial problems are increasing

Musk has had no shortage of financial trouble since he acquired Twitter and saddled it with debt from his leveraged buyout.

Musk, one of the world’s richest people, bought Twitter with $12.5 billion in bank loans and $7 billion in equity financing from investors including Oracle Corporation’s Larry Ellison. The embattled crypto company binance.

Twitter is in debt now $1 billion annually to service its debts. To offset these bills, Musk Lay off most of Twitter’s employees-Many paywalls Twitter features as part of $8 a month Subscribe to Twitter Blue, and it’s started Shipping developers To access the Twitter API at the usage levels it used to offer for free.

Musk came up with innovative ways to save pennies – for example, by depriving laid-off employees of work appropriate chapter refused to pay Company rent in its various offices.

But the $90 million legal bill remains a heavy burden for the vanity owner who has spent more time posting. Transgender memes on his website instead of balancing his company’s checkbook. All of this leaves him with a pressing concern: to seek whatever financial break he can get.

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