Elon Musk Sues Law Firm Exploiting Twitter Takeover, Racking Up $90M Bill
In a shocking turn of events, Elon Musk has filed a lawsuit against Wachtell Lipton Rosen & Katz, the law firm that led the fight to make him complete his takeover of Twitter. Musk alleges that the firm took advantage of the company and ran up a staggering $90 million bill during a vulnerable period. The complaint, filed in San Francisco state court by Musk’s X Corp, which is now the parent company of Twitter, claims that Wachtell violated ethical duties and California law by soliciting excessive bonus fees.
Interestingly, this lawsuit marks a role reversal for Musk, who is usually the defendant in legal suits against Twitter. These suits allege that under Musk’s leadership, the company allowed millions in unpaid expenses to accumulate from former employees, vendors, and landlords while purportedly trying to maintain financial stability. Representatives from Wachtell, including William Savitt, who played a prominent role in last year’s Delaware Chancery Court battle, have not yet responded to requests for comments regarding the lawsuit.
The legal battle between Twitter and Musk involved numerous lawyers on both sides, with some charging exorbitant rates of up to $1,000 per hour. Columbia University law professor John Coffee speculated that the total legal fees could have exceeded $1 billion if the case had proceeded to trial. X Corp alleges that Wachtell arranged to bill Twitter on an hourly basis rather than a contingency basis, thereby eliminating any risk for the law firm while earning a substantial success fee. However, the agreement between the company and the law firm does not specify the amount or formula used to determine the success fee.
The lawsuit also criticizes “lame duck” executives at Twitter who engaged in excessive spending before Musk assumed control. X Corp accuses Wachtell of taking advantage of this situation to line its own pockets with funds from the company’s cash register during the transitional period. Bloomberg reports that representatives for Wachtell have yet to respond to the allegations.
Credit: The Star : Tech Feed
