Elon Musk Sues Law Firm for Coercing Twitter Purchase, Seeks $90 Million in Damages.

Elon Musk Sues Law Firm

Elon Musk, CEO of Twitter, has initiated legal proceedings against Wachtell, Lipton, Rosen & Katz, a law firm involved in the acquisition of the social media platform. Musk’s company, X Corp, which owns Twitter, seeks to recover a significant portion of the $90 million fee received by Wachtell. The fee was granted for assisting in thwarting Musk’s attempt to back out of the $44 billion Twitter purchase.

Elon Musk that Wachtell took advantage of the situation by accepting substantial fees from departing Twitter executives who were pleased that Musk would be compelled to proceed with the acquisition. Musk argues that the $90 million payment is excessive, considering the relatively lesser work performed by Wachtell in the Delaware lawsuit, which involved a smaller fee.

In the complaint, Musk accuses Wachtell of effectively enriching themselves at the expense of the company, likening it to lining their pockets while the ownership of Twitter was being transferred to him.

Musk’s objective is to reclaim the exorbitant fees charged by Wachtell. He asserts that one of Wachtell’s partners, along with Twitter’s chief legal officer, Vijaya Gadde, signed an agreement on the day the acquisition was finalized, which permitted the additional fees to be levied.


The lawsuit also references Martha Lane Fox, a former Twitter director, who expressed astonishment upon learning about the lawyers’ compensation. She conveyed her surprise in an email to Twitter’s general counsel.

Wachell’s response to the requests for comment is still pending. It is worth noting that Gadde, Fox, and the general counsel are not implicated in the lawsuit, as revealed in the report.

Since Elon Musk assumed control of Twitter, the company has been entangled in various legal disputes. Musk has faced lawsuits from landlords, vendors, and consultants who allege non-payment. Additionally, Twitter has issued a threat to sue Meta Platforms, owned by Mark Zuckerberg, over their new Threads app.

Wachtell has previously dealt with lawsuits involving billionaires. One notable instance was their lengthy legal battle with Carl Icahn concerning his takeover of CVR Energy in 2012. Icahn later filed a malpractice lawsuit against Wachtell, but the case was dismissed by the judge.

According to Reuters, the X Corp versus Wachtell lawsuit is currently being heard in the California Superior Court in San Francisco, with the case number CGC-23-607461. The report was authored by Jonathan Stempel in New York and edited by Marguerita Choy.

Upon Elon Musk’s takeover of Twitter, a significant portion of the workforce was let go, resulting in the loss of jobs for approximately 80 percent of employees. The number of personnel dropped from 7,800 individuals to less than 600 engineers. Musk openly acknowledged that this decision was difficult and painful due to its impact on numerous employees.

Under Musk’s leadership, Twitter has undergone controversial changes, including the implementation of fewer content moderation rules and the introduction of a paid verification process. The tumultuous environment at Twitter reportedly created an opportunity for employees of Meta Platforms (formerly Facebook) to develop a competing app, as stated in The New York Times.

Meta officially launched Threads, their new app, which Mark Zuckerberg claimed attracted approximately 30 million sign-ups within the first 24 hours. The allegations raised by Musk’s legal representative add an unexpected twist to the already fierce competition among major tech companies in the social media realm.

As the legal battle unfolds, the accusations and counterclaims exchanged between Meta and Musk’s camp have the potential to impact the future trajectory of Threads and the ongoing rivalry between these industry giants. The outcome of this dispute may have significant implications for the evolving landscape of social media.

Officially Battle is on.