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Twitter is facing a spate of lawsuits with claims piling up from owners, consultants and vendors, all alleging that invoices have not been paid.
It comes as the social media company tries to cut costs and break even since its $44 billion acquisition of billionaire Elon Musk.
So far, the claims total more than $14 million, plus interest based on nine lawsuits seen by the Wall Street Journal.
They include a $7,000 invoice issued by Twitter’s marketing department for a ‘gift box for Elon’ shortly before the $44 billion deal closed on October 27, and the vendor that provided the box hasn’t yet. Have you received the payment.
Company court documents revealed the gift box contained a sandblasted logo on a bottle of Japanese whiskey, an oversized bomber jacket and socks worth more than $250, among other items.
Twitter is facing multiple lawsuits from owners, consultants and vendors who claim the company has yet to pay them; invoices total more than $14 million
Elon Musk, who became the company’s CEO in October 2022, has taken a more frugal approach to spending at the company in a bid to cut costs.
Musk has been questioning almost every penny since he bought Twitter with many of the other bills already unpaid when he took office last October.
From the moment he set foot in the San Francisco headquarters, he immediately adopted a more frugal attitude toward spending at the company, even auctioning off office supplies, like a huge Twitter bird statue, and other thousand-dollar items from from $25.
Items from the San Francisco office included valuable luxury items such as a $20,000 espresso machine, a $10,000 vegetable dryer, and a $17,000 braising pan. A plant pot in the shape of an ‘@’ was also up for grabs, along with chairs, tables, and barrels.
In December it was reported that Musk was no longer paying rent on Twitter’s Seattle office and also planned to close one of the company’s offices in New York.
Since then, the San Francisco headquarters has condensed from four floors to two, with lavish perks now reportedly replaced by stinking offices that are no longer cleaned after firing janitors who went on strike for better pay.
He left the office reeking of takeout leftovers and body odor according to current and former employees.
In the past, Musk has experienced running companies on the brink of financial ruin, including Tesla, which came very close to running out of money.
Musk seems to be hands-on when it comes to managing the company’s financial challenges, putting pressure on suppliers and vendors when saving money was critical.
According to Van Conway, a restructuring expert who has helped struggling companies for nearly four decades, “What Elon Musk is doing is essentially mimicking bankruptcy. He’s cutting costs with a machete.’
From the moment Musk set foot in the San Francisco headquarters, he immediately adopted a more frugal attitude toward spending at the company.
Elon Musk is seen entering Twitter headquarters in October 2022 with a sink
Since taking office in October, Musk has implemented a number of significant changes at Twitter, which has a history of losing money.
In response to an advertiser pullout and debt spending related to the deal, Musk cut staff and costs.
He publicly criticized the company’s spending, including $13 million a year in employee meals.
Although he initially suggested that Twitter could face bankruptcy due to losing more than $4 million a day, Musk recently stated that the company is now making progress toward breaking even.
Twitter is currently private and no longer reports its financial details publicly.
The company is facing at least three lawsuits related to office space, including allegations that it failed to pay nearly $6.8 million in rent during December and January at its San Francisco headquarters.
Last year it owed $239 million mainly for office space and data center facilities.
In a separate lawsuit, a marketing firm claimed Twitter owes nearly $400,000 for company-branded merchandise.
Musk’s other company, Tesla, has also faced financial challenges, particularly during production of the Model 3 compact car.
Tesla extended payment terms from 60 to 90 days and stopped some payments, prompting some suppliers to file mechanical liens seeking unpaid compensation.
Twitter headquarters in San Francisco. The company has allegedly stopped paying the rent
“We’re not behind because we can’t pay them,” Musk said at the time. ‘It’s just because we’re discussing whether the parts are correct.’
Tesla also reached out to landlords seeking rent reductions at the start of the Covid-19 pandemic.
Some of the pending claims related to the company’s efforts to close the acquisition deal with Musk.
A lawsuit that has since been dismissed was filed by Private Jet Services Group LLC in December 2022 seeking $197,725 for arranging last-minute charter flights from New Jersey to San Francisco and back for then-chief marketing officer Leslie Berland.
Marty O’Neill, Twitter’s head of global strategic sourcing, told the charter company that Twitter would not pay for the flights, arguing that only designated representatives were allowed to book flights under their contract with Private Jet Services.
Another Twitter worker suggested that former CEO Parag Agrawal had approved the flights, but O’Neill refused to budge under rules implemented under the new administration.