Twitter Sued for $1.6 Million by Advisory Firm Over Unpaid Bills After Elon Musk Acquisition

The banks providing $13 billion in financing last year for Elon Musk's acquisition of Twitter

By Reuters | Updated: 6 February 2023 16:23 IST

Photo Credit: Reuters

Elon Musk acquired Twitter for $44 billion in October

Highlights

Innisfree M&A Incorporated sued Twitter in New York State Supreme Court
Last month Britain's Crown Estate also sued Twitter over unpaid rent
Advertising spending on Twitter dropped by 71 percent in December

US-based advisory firm Innisfree M&A Incorporated sued Twitter on Friday in New York State Supreme Court, seeking about $1.9 million (roughly Rs. 15.7 crore) for what it says are unpaid bills after it advised the social media company on its acquisition by Elon Musk last year.

"As of December 23, 2022, Twitter remains in default of its obligations to Innisfree under the Agreement in an amount of not less than $1,902,788.03," the lawsuit said.

Twitter and a lawyer for Innisfree did not immediately respond to request for comment.

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Musk in October closed the $44 billion (roughly Rs. 3.6 lakh crore) deal announced in April that year and took Twitter private.

Last month Britain's Crown Estate, an independent commercial business that manages the property portfolio belonging to the monarchy, said that it had begun court proceedings against Twitter over alleged unpaid rent on its London headquarters.

Advertising spending on Twitter dropped by 71 percent in December, data from an advertising research firm showed, as top advertisers slashed their spending on the social-media platform after Musk's takeover.

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The banks providing $13 billion in financing last year for the Tesla chief executive's acquisition of Twitter abandoned plans to sell the debt to investors because of uncertainty around the social media company's fortunes and losses, Reuters reported last month.

Twitter made its first interest payment on a loan that banks provided to help finance Musk's purchase of the social media company last year, Reuters reported last month.

It was reported last month that Elon Musk's team has been exploring using as much as $3 billion (roughly Rs. 1,06,000 crore) in new fundraising to help repay some of the $13 billion in debt tacked onto Twitter for his buyout of the company.

Musk's team has said to people familiar with the finances of the company that an equity raise, if successful, could be used to pay down an unsecured portion of the debt that carries the highest interest rate within the $13 billion Twitter loan package.

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