05 March 2024 – Former top executives of Twitter, including ex-CEO Parag Agrawal, have filed a lawsuit against Elon Musk, seeking over $128 million in unpaid severance. The legal action, filed in a San Francisco court, alleges Musk fired them without cause and displayed a “cavalier attitude” toward financial obligations. The former executives, also comprising ex-CFO Ned Segal, ex-chief legal officer Vijaya Gadde, and former General Counsel Sean Edgett, claim they are owed one year’s salary and stock options.
About the Lawsuit:
In the 39-page lawsuit, the plaintiffs assert that under Musk’s leadership, Twitter has become a “scofflaw,” failing to meet financial obligations to employees, landlords, vendors, and others. They accuse Musk of disregarding rules, refusing to pay bills, and leveraging his wealth and power to override dissenting voices within the company. The lawsuit reflects the fallout from Musk’s acquisition of Twitter, now named X, for $44 billion, leading to the termination of the mentioned executives in October 2022.
Claims and Allegations:
The former executives contend that Musk used a fabricated instance of gross negligence and wilful misconduct, involving Twitter’s payment of fees to outside lawyers for the acquisition, as a pretext to withhold their severance payments. They argue that if Musk deemed any payments improper, he should have sought to terminate the deal rather than deny executives their rightful severance after the deal’s closure.
Musk’s acquisition of Twitter followed a contentious legal battle with top executives, during which Twitter took Musk to court to ensure compliance with the acquisition’s terms. The lawsuit sheds light on the broader challenges within X, facing additional legal actions from former employees seeking substantial severance packages. Class-action suits, totaling at least $500 million, claim rank-and-file workers are owed due compensation. X is also entangled in legal disputes related to alleged non-payment to a former PR firm, landlords, vendors, and consultants.
Conclusion:
The legal dispute between former Twitter executives and Elon Musk underscores the complexity and tensions arising from the acquisition and subsequent management decisions. The lawsuit not only seeks financial redress for the executives but also highlights broader concerns about Musk’s leadership style and financial practices within X. As the legal proceedings unfold, the case may have significant implications for how mergers and executive severance are handled in high-profile tech acquisitions. The outcome could shape future corporate governance discussions and practices within the technology industry.
