Three former Twitter executives, including ex-CEO Parag Agrawal, are suing the Elon Musk-led social media platform for over $1 million in legal costs. The lawsuit accuses Twitter of initially agreeing to cover the executives’ legal fees, but later reneging on its obligations.
“Despite timely written demand along with documentation from plaintiffs through their counsel, the company has not advanced to plaintiffs their expenses actually and reasonably incurred related to the various proceedings. Over two months after the plaintiffs’ initial written demand, the company offered only a cursory acknowledgment of receipt, but still refused to acknowledge its obligations and to remit payment of any invoices,” the lawsuit read.
The suit, filed in Delaware Chancery Court, involves Agrawal, former CFO Ned Segal, and ex-legal chief Vijaya Gadde, who faced legal expenses in several proceedings against Twitter. These included inquiries from the Securities and Exchange Commission (SEC) and the Department of Justice (DoJ).
The SEC has initiated an investigation into whether Elon Musk, who purchased Twitter for $44 billion in a turbulent takeover last year, violated regulations by delaying the disclosure of his initial 9.2% stake in the company. According to the former executives’ lawsuit, Agrawal was instructed by the SEC to “take measures to preserve certain documents pertaining to his work” at Twitter before and after he left the company.
That being said, the lion’s share of the former executives’ legal fees, around $1.1 million, were owed to ex-legal chief Vijaya Gadde for her Congressional testimony earlier this year. Overall, the suit alleges that the former executives incurred significant legal fees handling the cases against Twitter and complying with various demands, and thus, they should be compensated.
As of writing, Elon Musk’s Twitter has not issued a comment about the matter.
Since his turbulent takeover of the company, Elon Musk has initiated a series of drastic changes on Twitter. These include a notable workforce reduction initiative, which reduced the company’s headcount from about 8,000 employees to just around 1,500. In a recent interview with the BBC, Musk admitted that letting go of thousands of Twitter employees was a painful process.
However, Musk also noted that Twitter, in its current state, is already roughly at break-even. With the company’s advertisers returning to the platform, Musk stated that Twitter might be on track to be cash flow positive in the coming months. “I feel like we’re headed to a good place. We’re roughly break-even; I think we’re trending towards being cash flow positive very soon, literally in a matter of months,” Musk said.
The former Twitter executives’ lawsuit can be accessed below.
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