Elon Musk has filed a lawsuit against Wachtell, Lipton, Rosen & Katz, a prestigious law firm that represented Twitter during the court proceedings for Musk’s takeover of the company last year. The lawsuit claims that the law firm obtained an unfairly large payment from Twitter for its services. Musk’s X Corp, which owns Twitter, filed the complaint in the California Superior Court in San Francisco.
Wachtell was hired by the previous management of Twitter to enforce Musk’s agreement to acquire the company when he attempted to back out of his initial offer to take Twitter private for $44 billion. The law firm represented Twitter in the legal battle with Musk for four months and played a crucial role in closing the deal, with Musk ultimately purchasing the company on October 27, 2022.
During the court fight, Twitter had agreed to pay Wachtell on an hourly basis. However, upon the completion of the acquisition, the law firm received a “mammoth success fee” of $90 million. Musk argues that this payout is “unconscionable” and believes it violates the law firm’s ethical duties, as well as California law.
The complaint filed by Musk’s X Corp accuses Wachtell of taking advantage of the situation and profiting at the expense of Twitter. It states, “Fully aware that nobody with an economic interest in Twitter’s financial well-being was minding the store, Wachtell arranged to effectively line its pockets with funds from the company cash register while the keys were being handed over to the Musk Parties.”
Musk is now seeking to recoup the excess fee payment and attorneys’ fees charged by Wachtell. The law firm has not yet responded to media requests for comment regarding the lawsuit.
In addition to the legal battle with Wachtell, Twitter is currently facing multiple lawsuits alleging that, under Musk’s leadership, the company allowed millions of dollars in unpaid expenses to accumulate for former employees, vendors, and landlords. Just recently, Twitter threatened to sue Mark Zuckerberg’s Meta Platforms over the launch of Threads, a text-based companion to Instagram, which Twitter views as a copycat.
The outcome of Musk’s lawsuit against Wachtell and the ongoing legal challenges faced by Twitter will likely have significant implications for both the company and Musk himself. It remains to be seen how the court will rule on the matter and what impact it will have on future legal proceedings involving Musk and his business ventures.
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