Now Elon Musk sues law firm behind Twitter takeover deal over $90 million 'success fee'

Amrutha Pagad
Amrutha PagadJul 10, 2023 | 10:08

Now Elon Musk sues law firm behind Twitter takeover deal over $90 million 'success fee'

Elon Musk is suing the law firm that forced him to close Twitter deal. Photo: AFP

Elon Musk's financial woes at Twitter are refusing to end. After trying to save pennies by denying payments to former employees, vendors, landlords, and others, Musk is looking to recoup legal fees paid to top law firm Wachtell, Lipton, Rosen & Katz, which in 2022, had forced him to close the Twitter takeover deal. 


  • Twitter is suing law firm Wachtell, Lipton, Rosen & Katz to recover a whopping $90 million paid in legal fees.
  • According to Twitter and Musk's argument, the law firm took advantage of a brief vulnerable period at the company to squeeze out $90 million as part of a "success fee", nearly six times the initial bill of $15.6 million in hourly fees.
  • The lawsuit has been filed in San Francisco Superior Court.

Wachtell, Lipton, Rosen & Katz had represented Twitter during the company's takeover. As Elon Musk had tried to wiggle out of the $44 billion acquisition, the law firm stepped in to ensure he completed the deal, albeit grudgingly in October 2022 at the agreed-upon price. 

'Twitter was left unprotected':

  • Now, Twitter in its lawsuit claims that the law firm took advantage of a client "left unprotected by lame duck fiduciaries who had lost their motivation to act in Twitter's best interest pending its imminent sale." 
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.
- The lawsuit reads
  • Former Twitter Chief Legal Officer Vijaya Gadde had signed the new agreement with the law firm awarding the purported "success fee". 
  • In response, a former Twitter director in an email to general counsel Sean Edgett exclaimed, "O My Freaking God." 
  • However, Edgett reportedly expedited $84 million payment to Wachtell, just 10 minutes before he was fired, according to the latest Twitter lawsuit. 


The many woes of Musk at Twitter

Elon Musk is fighting an uphill battle at Twitter to keep it solvent as its debt mounts. 

  • While on one hand, Musk is accusing a law firm of charging excess fees by taking advantage of the company, on the other hand, Musk's Twitter was sued again earlier in the month for refusing to proceed with nearly 900 arbitration cases from former employees for not paying severance. 
  • There are several other lawsuits to Twitter's name over unpaid bills. 
  • Musk has also threatened to sue Meta over the Threads app for misappropriating Twitter's "trade secrets and intellectual property". 
  • Threads app by Meta launched last week had amassed several millions in users and is posing the first direct challenge and competition to Twitter. 
  • Musk has called the Threads app "cheating" and no healthy competition. 
  • Twitter had also alleged that Meta hired fired or laid off Twitter employees to build the Threads app and that the employees "improperly retained Twitter documents and electronic devices" while working at Meta. 

  • Meta had categorically denied the charge that anyone on its Threads engineering team is a former Twitter employee. 
Last updated: July 10, 2023 | 10:08
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