Elon Musk’s company has filed a lawsuit against the law firm that represented Twitter during his attempt to take the company private. The lawsuit claims that the firm, Wachtell, Lipton, Rosen, and Katz, charged an exorbitant amount for its services. According to the lawsuit, the law firm accumulated a “last minute” legal bill of $90 million. Wachtell had been representing Twitter before Musk’s acquisition and helped finalize the deal in November 2022, receiving the $90 million fee for its work. Now, X Corp., Twitter’s holding company, is seeking repayment of any excess fee payment as well as attorneys’ fees related to the litigation costs. Elon Musk’s company is being represented by Reid Collins & Tsai, a litigation boutique based in Austin, Texas. Both firms involved in the lawsuit have declined to comment.

This is not the first time that Musk has faced legal action regarding payment to Twitter’s vendors. After Musk took over the company, it faced 26 lawsuits from vendors claiming non-payment, as reported by the online legal records database Plainsite. Additionally, Twitter stopped paying rent for its San Francisco headquarters and was reportedly refusing to pay Google for the use of its cloud infrastructure.

The current lawsuit is significant because it involves one of the leading law firms in the United States. Wachtell, which has represented numerous companies and investment vehicles in similar deals, approached Twitter in June 2022, expressing its interest in providing representation. Ben Roth, a partner at Wachtell, wrote an email to senior Twitter executives, stating their keenness to assist in preparing for the possibility of Musk reneging on his contract. Twitter’s former general counsel and ex-finance chief were among the executives involved in engaging Wachtell.

Musk’s attempt to back out of the Twitter deal was highly unusual and ultimately unsuccessful. He claimed that the company had not adequately disclosed the number of spam and fake accounts on the platform. Twitter retaliated by suing Musk for not honoring his commitment to the company’s shareholders. Eventually, Musk relented and acquired Twitter at the agreed-upon price. The legal battle took place in Delaware chancery court, which specializes in corporate litigation. Wachtell had highlighted its expertise in Delaware courts as part of its pitch to Twitter.

The lawsuit, X Corp v Wachtell, Lipton, Rosen & Katz, is currently being heard in the California Superior Court, with the case number CGC-23-607461.

In summary, Elon Musk’s company has taken legal action against the law firm that represented Twitter during his attempt to take the company private. The lawsuit alleges that the firm charged an excessive amount for its services. This is not the first time that Musk has faced legal challenges regarding payment to Twitter’s vendors. Ultimately, Musk’s attempt to back out of the Twitter deal was unsuccessful, and the acquisition went through. The current lawsuit is significant as it involves a prominent law firm that specializes in corporate litigation. The case is currently being heard in the California Superior Court.

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