A group of former Twitter executives is making headlines as they take legal action against tech mogul Elon Musk, aiming to recover more than $128 million in severance they claim Musk has not paid since he acquired the company, now called X, over a year ago.
Background: The Acquisition of Twitter by Elon Musk
In a surprising move, Elon Musk acquired Twitter, which is now rebranded as X, over a year ago. This acquisition was met with mixed reactions, and it seems to have led to a series of legal disputes, particularly concerning severance payments to former executives.
The Lawsuit: Allegations of Revenge and Unpaid Severance
According to the lawsuit filed on Monday in the US District Court for the Northern District of California, the executives allege that Musk’s refusal to make the severance payments was an act of “revenge”. This alleged revenge stems from Musk’s reported discontent with being obligated to proceed with the $44 billion acquisition deal, which he reportedly tried to back out of for months.
The Executives Involved
The executives involved in this lawsuit include former Twitter CEO Parag Agrawal, former CFO Ned Segal, former Chief Legal Officer Vijaya Gadde, and former General Counsel Sean Edgett. Interestingly, all of them were swiftly terminated within hours after Musk gained control of Twitter.
Claims and Allegations
In the lawsuit, it is claimed that Musk fired the executives without valid reason and then fabricated cause by accusing them of “gross negligence” and “willful misconduct” without any factual basis.
No Response from X
So far, X, formerly Twitter, has not responded to requests for comments regarding this legal dispute.
Additional Legal Actions
This recent legal action is just one of the many lawsuits that have been brought forth by former Twitter employees following Musk’s acquisition. In July, a former Twitter human resources leader initiated a lawsuit seeking class-action status.
The lawsuit aims to compel Musk and the company to pay additional severance benefits allegedly owed to former employees, totaling no less than $500 million. There have also been accusations that the company failed to pay annual bonuses to employees laid off after Musk’s takeover.
Previous Lawsuits and Challenges
Additionally, Agrawal, Gadde, and Segal had previously sued Musk to recover more than $1 million in legal fees they claimed were owed to them. The company was directed to pay these fees in a ruling by the Delaware Chancery Court last year.
Musk and X have also faced legal challenges from vendors, landlords, and business partners who have alleged non-payment of amounts owed.
Conclusion: Implications and Reflections
In their statement accompanying the lawsuit, the former executives highlighted that “Musk’s refusal to pay Plaintiffs is part of a larger pattern and practice of failing to comply with his payment obligations.”
As this legal battle unfolds, it sheds light on the complexities and challenges that can arise in high-stakes corporate acquisitions and the responsibilities that come with such transactions.