Elon Musk, CEO of Tesla Inc., leaves the courthouse in San Francisco, California on Tuesday, January 24, 2023.
Marlene Sloss | Bloomberg | Getty Images
Elon Musk’s attorneys filed a lawsuit this week against the law firm that represented Twitter when Musk tried to take over the corporate last yr, claiming the corporate was overcharging for its work.
The lawsuit says Wachtell, Lipton, Rosen and Katz, which was Twitter’s company before Musk’s acquisition, raised the $90 million legal bill “on the last minute.”
Wachtell represented Twitter after Musk pulled out of his original $44 billion takeover bid for Twitter. The law firm helped close the deal in November 2022 and was paid $90 million for work securing the deal, which was offered at a major premium over Twitter’s public market valuation.
X Corp., Twitter’s holding company, seeks reimbursement of “any excessive fees involved” and attorney’s fees related to litigation costs. Musk is represented by Reid Collins & Tsai, a court boutique based in Austin, Texas.
Attorneys at Reid Collins and Wachtell didn’t reply to requests for comment.
This is not the primary time Musk has tried to stop Twitter vendors from getting paid. After Musk acquired Twitter, charging it with $13 billion in debt, the corporate was sued at the very least 26 times for non-payment by the supplier, in line with the Plainsite online legal database. Business stopped paying rent at its headquarters in San Francisco and was rumored to be refusing pay Google to make use of the cloud infrastructure.
The newest lawsuit concerns one among America’s leading law firms. Wachtell, which has represented dozens of corporations and investment vehicles in similar transactions, in June 2022.
“We could be very excited by representing Twitter within the preparations,” Wachtell’s partner Ben Roth wrote in an email to Twitter executives about Musk’s possible withdrawal from the deal. Twitter’s former general counsel and former chief financial officer were among the many executives involved in engaging Wachtell.
Musk’s try and withdraw from the deal on Twitter was highly unusual and ultimately unsuccessful. He alleged after agreeing to the deal that the corporate didn’t adequately disclose the variety of spam and faux accounts on the platform. Twitter sued Musk for failing to satisfy his obligations to the corporate’s shareholders, and Musk eventually relented, buying Twitter at an agreed price.
The dispute was within the Delaware Chancery Court, which is structured to handle corporate disputes. A part of Wachtell’s Twitter presentation was his sophistication within the Delaware courts.
The case is X Corp v. Wachtell, Lipton, Rosen & Katz within the Supreme Court of California (San Francisco County), Case No. CGC-23-607461.
— Lora Kolodny of CNBC contributed to this report
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