BUSINESS INSIDER
Twitter’s parent company, X Corp., sued a law firm that was hired by Twitter’s former management last year during Elon Musk’s contentious $44-billion buyout of the social media company.
- Twitter previously hired a law firm to force Elon Musk to complete the buyout of the company.
- The law firm, Wachtell, Lipton, Rosen & Katz, hit Twitter with a $90 million bill for its services.
- Under Musk’s management, Twitter is now accusing the firm of exploiting its client.
The lawsuit filed Friday accuses Wachtell, Lipton, Rosen & Katz, an elite corporate law firm, of exploiting its client by charging Twitter $90 million in legal fees for “a few months” of its services and seeks to recoup the payment.
“Fully aware that nobody with an economic interest in Twitter’s financial well-being was minding the store, Wachtell arranged to effectively line its pockets with funds from the company cash register while the keys were being handed over to the Musk Parties,” the lawsuit claimed.
Wacthell, which specializes in mergers and acquisitions, was hired around last July to enforce Musk’s $44-billion purchase of the company. At that time, Musk tried to walk away from the deal, raising objections to some of the data presented in Twitter’s financial disclosures.
Musk would complete the buyout on October 27.
The lawsuit claims that Wachtell tacked on a $84.3-million “success fee” and a $16-million invoice for hourly services for helping the company close the deal with Musk.
According to a copy of an email attached to the court documents, former Twitter director and board member Martha Lane Fox appeared to express shock after the company’s former general counsel Sean Edgett sent a copy of the fees.
“O My Freaking God,” she wrote, in response to an email Edgett.
A copy of an email provided in X Corp.’s lawsuit against Wachtell, Lipton, Rosen & Katz.San Francisco County Superior Court
“Despite any initial shock, Twitter’s lame-duck board members voted to approve Wachtell’s excessive and unconscionable fee,” the lawsuit argued.
Lane Fox did not respond to a request for comment sent outside of working hours.
