California Superior Court in San Francisco – Elon Musk’s X Corp, which owns Twitter, has filed a lawsuit against the prestigious law firm Wachtell, Lipton, Rosen & Katz. The purpose of the lawsuit is to reclaim a significant portion of the $90 million fee that Wachtell received from Twitter for preventing Musk from walking away from his $44 billion acquisition of the social media platform.
The complaint alleges that Wachtell took advantage of Twitter by accepting substantial “success” fees from departing executives during the final days leading up to the buyout on October 27, 2022. These executives were purportedly grateful that Musk would be forced to proceed with the acquisition. Musk, the world’s wealthiest individual known for leading Tesla Inc and SpaceX, believes the $90 million payout is “unconscionable,” especially in light of Wachtell’s bill of less than one-third of that amount for their limited work on the Delaware lawsuit.
In his complaint, Musk accuses Wachtell of enriching itself while he took ownership of Twitter, stating that the law firm effectively “lined its pockets” with company funds. X Corp seeks to recover the “excessive” fees charged by Wachtell under an agreement made on the day of closing between one of the firm’s partners and Twitter’s chief legal officer, Vijaya Gadde.
During the lawsuit, Musk also presented an email from former Twitter director Martha Lane Fox to general counsel Sean Edgett. Upon discovering the amount the lawyers would be paid, Fox exclaimed, “O My Freaking God.”
Wachtell has not yet responded to requests for comment, and the individuals mentioned in the lawsuit are not parties to the legal action. Since Musk’s acquisition, Twitter has faced various lawsuits from landlords, vendors, and consultants accusing him of not paying their bills. Additionally, Twitter has threatened to sue Meta Platforms, led by Mark Zuckerberg, over the latter’s new Threads app.
Notably, Wachtell has previously dealt with legal disputes involving billionaires and buyouts. The firm litigated against Carl Icahn for years over his hostile takeover of CVR Energy in 2012. In 2018, a judge dismissed Icahn’s malpractice claim related to the higher fees he had to pay the banks defending against the takeover, compared to if the merger had failed.
The lawsuit is titled X Corp v Wachtell, Lipton, Rosen & Katz and is currently ongoing in California Superior Court, County of San Francisco, under case number CGC-23-607461.
Jonathan Stempel reported this news from New York. Marguerita Choy edited the article.
Credit: The Star : Tech Feed
