Updated on July 8, 2023 8:34pm EDT
The suit filed by X Corp., Twitter’s new owner under Musk, accused Wachtell, Lipton, Rosen & Katz LLP of lining ‘its pockets with funds from the company cash register while the keys were being handed over’ to the Tesla CEO. Elon Musk’s Twitter is suing heavyweight merger law firm Wachtell, Lipton, Rosen & Katz LLP over “unconscionable,” “last minute” legal fees it charged last year when the group was hired by the social media platform amid the fight over the Tesla CEO’s takeover.
Musk’s X Corp., which owns Twitter, is seeking to recoup “any associated excess fee payment” and attorney’s fees from the $90 million Twitter paid in 2022 to keep the billionaire from backing out of his $44 billion deal to buy the platform, according to Reuters and CNBC.
X Corp claimed Wachtell “arranged to effectively line its pockets with funds from the company cash register while the keys were being handed over” in the suit filed in California Superior Court in San Francisco on Wednesday.
The suit balked at Wachtell’s “success” fees paid by departing Twitter executives days before Musk’s takeover, calling the $90 million fee “unconscionable” because the firm had charged less than a third of the total few in its first few months of work, Reuters reported.
On Thursday, Musk also threatened to sue Meta over its new rival app, Threads, which already has more than 70 million users since its launch Wednesday.
Threads was launched as Twitter announced last week users who haven’t signed up for the paid Blue status would be limited in the number of tweets they can view.
Musk has been mired in lawsuits since his controversial takeover of the platform, which was followed by massive layoffs and the decision to charge $8 per month for Blue checkmarks.
Fox Business has reached out to Wachtell for comment.
What are the allegations made by X Corp. against law firm Wachtell in the lawsuit filed by Elon Musk’s company regarding the Twitter takeover?
Updated on July 8, 2023 8:34pm EDT
In a shocking turn of events, Elon Musk’s X Corp., now the owner of Twitter, has filed a lawsuit against prestigious law firm Wachtell, Lipton, Rosen & Katz LLP. The suit accuses the firm of taking advantage of the chaos surrounding Musk’s takeover of Twitter and charging exorbitant legal fees at the last minute.
X Corp., which purchased Twitter under Musk’s leadership, is seeking to recover any excessive payments made to Wachtell, as well as attorney’s fees. Twitter had paid a whopping $90 million to ensure Musk wouldn’t back out of his $44 billion deal to acquire the platform.
The lawsuit claims that Wachtell took advantage of the situation and “lined its pockets” while the ownership of Twitter was being transferred. X Corp. argues that the $90 million fee charged by Wachtell was “unconscionable,” especially considering the much lower fees the firm had initially charged in the early stages of their work.
To add fuel to the fire, Musk has also threatened legal action against Meta, the parent company of Facebook, over its new rival app, Threads. Despite launching just a day ago, Threads has already gained over 70 million users. This comes as Twitter recently announced limitations on non-paying users, leading to the creation of alternative platforms like Threads.
Since his acquisition of Twitter, Musk has been embroiled in numerous legal battles. His controversial decisions, including significant layoffs and the introduction of a subscription fee for Blue checkmarks, have sparked outrage among users and potential legal consequences.
Fox Business has reached out to Wachtell for comment regarding the lawsuit, but no response has been provided thus far. The legal clash between Musk and Wachtell continues to captivate the business world, with the outcome yet to be determined. Stay tuned for updates on this gripping saga.
This lawsuit shines a spotlight on the complexities of legal fee structures and their potential impact on businesses. It will be interesting to see how the court addresses this issue and what it means for Twitter’s new owner, X Corp.
I’m curious to know the specifics of the “unconscionable” fees charged by Wachtell, Lipton, Rosen & Katz LLP. This lawsuit could shed light on the often opaque world of legal fees.