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Elon Musk is suing lawyers who worked for Twitter. He demands a refund

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Elon Musk bought Twitter in 2022 for $44 billion. Now it is suing a law firm that was hired by the former management of the social platform before the acquisition. The billionaire is demanding a refund of $90 million.

The information that the owner of the company is suing the law firm that previously supported the company makes more sense when we remember how Elon Musk’s takeover of Twitter came about.

Initially, when Elon Musk moved from jokes about buying the platform to action, the billionaire was supposed to buy Twitter in April 2022 for $ 44 billion. In July, however, he tried to withdraw, which at the time he explained by “false and misleading” information about the number of fake accounts on the platform.

Read also: Twitter threatens to sue Meta. Elon Musk comments

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Musk refused to pay, so he was sued

The then management of the company did not like this and Twitter sued Musk for breach of the purchase agreement. According to it, if the transaction is not completed for reasons not provided for in it, the party canceling it will have to pay damages of up to $1 billion.

Initially, Musk was preparing for a legal battle, but finally, a few days before it began in October, he agreed to pay the originally negotiated $ 44 billion.

The key role in the purchase was played by the law firm that Twitter hired at the time – Wachtell, Lipton, Rosen & Katz. This, after finalizing the transaction, was to receive a fee of $ 90 million.

It is the payment of this amount that is disputed by Elon Musk, who does not like having to pay a company that forced him to keep his word.

The Twitter acquisition was closed on October 27. According to the lawsuit, Wachtell was to charge Twitter $90 million for several months of work, of which $84.3 million was paid on the day the merger was finalized. The total amount included previous invoices totaling nearly $18 million, the lawsuit said.

Musk accuses lawyers of ‘poaching’

“Fully aware that no one who cares about Twitter’s financial health is looking after the business, Wachtell filled his pockets from the company’s budget when the leadership was transferred,” according to the lawsuit filed by Musk.

Most of the $84.3 million paid to Wachtell on October 27 was supposed to be a “success fee” for forcing Musk to close the deal.

Musk’s lawsuit said it was “unable to determine what portion of the total $90 million fee owed to Wachtell under the closing date letter agreement constitutes said success fee.” Based on other invoices and amounts charged, the fee to complete the transaction is estimated at $61 million or $72 million. Musk, however, is demanding a full refund of $90 million.

As noted by industry website ArsTechnica, Twitter under Musk has apparently not paid many bills since then, as more than 20 lawsuits loom over the company over unpaid bills for rent and miscellaneous services. Twitter is also facing lawsuits from former employees over unpaid severance pay and bonuses, as well as a lawsuit from former CEO Paraga Agrawal and other former executives over unpaid reimbursements.

Main photo source: The Washington Post/Getty Images



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