Elon Musk is suing elite law firm Wachtell as it tries to recover $90 MILLION it got from Twitter
Elon Musk has ordered elite law firm Wachtell, Lipton, Rosen & Katz to recover most of a $90 million compensation it received from Twitter for defeating its bid to walk away from its $44 billion buyout of the social media company.
The complaint from Musk’s X Corp, which owns Twitter, was filed Wednesday in California Superior Court in San Francisco.
Musk accused Wachtell of exploiting Twitter by accepting huge “success” fees handed out by outgoing Twitter executives who were thankful Musk would be forced to leave in the final days before the buyout’s closing on October 27, 2022. Close.
The world’s richest person, who also runs Tesla Inc and SpaceX, called the $90 million payout “unreasonable,” as Wachtell billed less than a third of that amount for his few months of work on the Delaware lawsuit.
Elon Musk has sued elite law firm Wachtell, Lipton, Rosen & Katz to recover most of a $90 million fee it received from Twitter for rejecting its offer to walk away from its buyout of $44 billion from the social media company
“Wachtell was fully aware that no one with an economic interest in Twitter’s financial well-being was paying attention to the shop and ensured that his pockets were effectively filled with cash from the company’s cash register while the keys were handed over to the Musk parties,” according to Musk’s lawsuit. .
Musk wants to recover “excess” fees that Wachtell charged under an agreement signed on closing day by one of his partners and Twitter’s chief legal officer Vijaya Gadde.
The complaint also quoted former Twitter executive Martha Lane Fox who, upon hearing how much lawyers would be paid, emailed general counsel Sean Edgett, “O My Freaking God.”
“Because of his flagrant violations of his professional duties and applicable ethical rules, Wachtell should be required to forfeit his entire $90 million compensation under the Closing Day Letter Agreement and pay back an amount of $90 million,” the lawsuit states.
If the court does not require Wachtell to forfeit the full compensation, Musk argues that he “should be ordered to refund the difference between the $90 million total compensation he received and the reasonable compensation he would have received if he complied with billing guidelines.” as agreed in the Engagement Letter dated 21 June.
Wachtell originally signed “a letter of engagement for an hourly representation,” but “did not obtain a written agreement for compensation related to the results of the underlying case,” Musk’s lawsuit alleges.
Twitter has been involved in a slew of actual or threatened lawsuits since Musk’s buyout
The huge last-minute fee reportedly paid to Wachtell in the final minutes before the merger shows that “Wachtell apparently believed that – unlike other law firms bound by ethical and fiduciary obligations – it was free to to solicit, aid and incite corporate waste by former Twitter executives in the death throes of their fiduciary role, and walk away with total compensation that has made it $90 million richer,” the lawsuit states.
Twitter’s $84 million wire transfer to Wachtell was allegedly posted just ten minutes before Gadde and Edgett were terminated in finalizing the merger.
Wachtell did not immediately respond to requests for comment. Gadde, Fox and Edgett are not parties to the lawsuit.
Musk’s Twitter has been involved in a slew of actual or threatened lawsuits since Musk’s buyout.
The company is facing more than 20 lawsuits over alleged unpaid bills for rent and various services.
Twitter is also facing a number of lawsuits from landlords, sellers and consultants accusing Musk of inflating bills. The photo shows Twitter’s headquarters in San Francisco
Twitter is also facing a barrage of lawsuits from ex-employees over unpaid severance payments and bonuses, and a lawsuit from former CEO Parag Agrawal and other ex-executives over unpaid benefits.
There are also reported to be many lawsuits filed by landlords, sellers and consultants accusing Musk of billing them, and a threatened lawsuit by Twitter against Mark Zuckerberg’s Meta Platforms over its new Threads app.
Wachtell is no stranger to billionaire lawsuits over buyouts, having spent years litigating with Carl Icahn over his hostile takeover of CVR Energy in 2012.
In 2018, a judge rejected a malpractice claim from Icahn, who was set to pay banks that helped defend CVR against the acquisition higher fees than if the merger failed.