Elon Musk Sues Law Firm Wachtell to Recover Fees From Twitter Buyout

Elon Musk wants to recoup "excess" fees that Wachtell charged under an agreement signed on the day of closing.

By Reuters | Updated: 8 July 2023 11:23 IST

Elon Musk Sues Law Firm Wachtell to Recover Fees From Twitter Buyout

Photo Credit: Reuters

Musk bought Twitter last year for $44 billion (roughly Rs. 3,37,465 crore)

Highlights

Musk threatened lawsuit against Mark Zuckerberg's Meta
Elon Musk has sued the elite law firm Wachtell to recover $90 million
The complaint by Musk's X Corp was filed on Wednesday

Elon Musk has sued the elite law firm Wachtell, Lipton, Rosen & Katz to recover most of a $90 million (roughly Rs. 743 crore) fee it received from Twitter for defeating his bid to walk away from his $44 billion (roughly Rs. 3,37,465 crore) buyout of the social media company.

The complaint by Musk's X Corp, which owns Twitter, was filed on Wednesday in the California Superior Court in San Francisco.

Musk accused Wachtell of exploiting Twitter by accepting, in the final days before Oct. 27, 2022, buyout closed, huge "success" fees doled out by departing Twitter executives who were grateful that Musk would be forced to close.

[Sponsored] Samsung Galaxy S24: The Ultimate Camera Phone With Smarter On-Device AI

The world's richest person, who also runs Tesla and SpaceX, called the $90 million (roughly Rs. 743 crore) payout "unconscionable," given that Wachtell had billed less than one-third that sum for its few months of work on the Delaware lawsuit.

"Wachtell arranged to effectively line its pockets with funds from the company cash register while the keys were being handed over" to Musk, the complaint said.

Musk wants to recoup "excess" fees that Wachtell charged under an agreement signed on the day of closing by one of its partners and Twitter's chief legal officer Vijaya Gadde.

Twitter or Threads: Who Wins Outside of a Cage Fight

The complaint also quoted former Twitter director Martha Lane Fox who, upon learning how much lawyers would be paid, emailed general counsel Sean Edgett: "O My Freaking God."

Wachtell did not immediately respond to requests for comment. Gadde, Fox and Edgett are not parties to the lawsuit.

Twitter has been involved in a slew of actual or threatened litigation since Musk's buyout.

Tesla Cars Could Achieve Full Self-Driving 'Later This Year': Elon Musk

These include many lawsuits by landlords, vendors and consultants accusing Musk of stiffing them on bills, and a threatened lawsuit by Twitter against Mark Zuckerberg's Meta Platforms over the latter's new Threads app.

Wachtell is no stranger to lawsuits by billionaires over buyouts, having spent years litigating with Carl Icahn over his 2012 hostile takeover of CVR Energy.

In 2018, a judge dismissed a malpractice claim by Icahn, who found himself on the hook to pay banks that helped defend CVR against the takeover higher fees than if the merger failed.

The case is X Corp v Wachtell, Lipton, Rosen & Katz, California Superior Court, County of San Francisco, No. CGC-23-607461.

From the Nothing Phone 2 to the Motorola Razr 40 Ultra, several new smartphones are expected to make their debut in July. We discuss all of the most exciting smartphones coming this month and more on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.