Elon Musk has sued the elite law firm of Wachtell, Lipton, Rosen & Katz to recover most of a $90 million fee he received from Twitter for defeating his bid to back out of his $44 billion purchase of the company. social networks.
The lawsuit by Musk’s X Corp, which owns Twitter, was filed Wednesday in California Superior Court in San Francisco.
Musk accused Wachtell of exploiting Twitter by accepting, in the final days before the October 27, 2022 purchase closed, huge “hit” fees doled out by departing Twitter executives who were grateful Musk was leaving. was forced to close.
The world’s richest person, who also runs Tesla Inc and SpaceX, called the $90 million payment “extraordinary” given that Wachtell had billed less than a third of that sum for his few months of working on the lawsuit. Delaware.
Elon Musk sued the elite law firm of Wachtell, Lipton, Rosen & Katz to recover most of a $90 million fee he received from Twitter for defeating his bid to back out of his $44 billion purchase of the Twitter company. social networks.
“Fully aware that no one with an economic interest in the financial well-being of Twitter was looking after the shop, Wachtell managed to line his pockets with funds from the company’s cash register while the keys were handed over to Musk Parties,” he says. Musk’s lawsuit. .
Musk wants to recover “excess” fees that Wachtell collected under an agreement signed on closing day by one of his partners and Twitter chief legal officer Vijaya Gadde.
The complaint also cited former Twitter head Martha Lane Fox who, upon learning how much the lawyers would be paid, emailed general counsel Sean Edgett: “Oh my gosh.”
“Because of his flagrant violations of his professional duties and applicable ethical rules, Wachtell should be required to waive his full $90 million fee under the Closing Day Letter Settlement and make restitution in the amount of $90 million,” the lawsuit says.
If the court does not require Wachtell to waive the full fee, Musk argues that he “should be ordered to restitute the difference between the total $90 million fee he received and the reasonable fees he would have received had he adhered to billing guidelines.” . It was agreed in the Letter of Commitment of June 21.
Wachtell originally “signed a letter of commitment to hourly fee representation” but was “unable to obtain a written agreement for any fees tied to the results of the underlying case,” Musk’s lawsuit alleges.
Twitter has been embroiled in a series of actual or threatened litigation since its purchase of Musk.
The huge last-minute fee that was allegedly passed on to Wachtell in the last minutes before the merger shows that ‘Wachtell apparently believed that, unlike other law firms bound by ethical and fiduciary obligations, it was free to solicit, assist and instigating corporate waste by former Twitter executives in the throes of their fiduciary roles, and walking away with a total fee that made them $90 million richer,” the lawsuit claims.
The $84 million transfer from Twitter to Wachtell is said to have been published just ten minutes before Gadde and Edgett were fired following the close of the merger.
Watchtell did not immediately respond to requests for comment. Gadde, Fox and Edgett are not parties to the lawsuit.
Musk’s Twitter has been involved in a number of actual or threatened lawsuits since Musk’s purchase.
The company faces more than 20 lawsuits for alleged unpaid bills for rent and various services.
Twitter is also facing a series of lawsuits from owners, vendors and consultants who accuse Musk of defrauding them out of invoices. In the image, the Twitter headquarters is seen in San Francisco.
Twitter is also facing a spate of lawsuits from former employees for unpaid severance and bonuses, and a lawsuit from former CEO Parag Agrawal and other former executives for unpaid refunds.
There are also reportedly many lawsuits from owners, vendors and consultants accusing Musk of scamming them out of invoices, and a threatened Twitter lawsuit against Mark Zuckerberg’s Meta Platforms over the latter’s new Threads app.
Wachtell is no stranger to lawsuits from takeover billionaires, having spent years litigating Carl Icahn over his hostile takeover of CVR Energy in 2012.
In 2018, a judge threw out a malpractice lawsuit by Icahn, who was forced to pay banks that helped defend CVR against the acquisition at higher rates than if the merger failed.