Elon Musk has sued the law firm Wachtell, Lipton, Rosen & Katz to recover the $90 million it received from Twitter
Elon Musk has sued the law firm Wachtell, Lipton, Rosen & Katz to recover the $90 million it received from Twitter after the $44 billion takeover, accusing the firm of breaching its fiduciary duty and seeking restitution for a $90 million payment.
Twitter has taken legal action against the law firm Wachtell, Lipton, Rosen & Katz, which it had engaged to facilitate Elon Musk’s acquisition of the company. The social media giant claims that Wachtell inappropriately received a $90 million payout as the deal approached its closing stage.
According to the complaint filed by Twitter in a California Superior Court, Wachtell, led by William Savitt and its litigation department, played a central role in a lavish spending spree carried out by departing executives of Twitter. Twitter is seeking complete restitution of the $90 million paid to Wachtell, which includes an unspecified “success fee” that the company deems excessive and unconscionable.
There has been no response from William Savitt, the attorney representing Wachtell in the Twitter case, regarding the allegations.
Elon Musk successfully completed the takeover in October, with the deal valued at $44 billion. Twitter accuses Wachtell of making a last-minute alteration to its fee structure on the day of the closing, disregarding instructions from the new ownership to halt payments to third parties prior to the imminent merger.
In its complaint, Twitter states, “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.”According to the complaint, Twitter’s board approved the payment to Wachtell on the day the deal concluded. Bret Taylor, the chairman of Twitter’s board of directors at the time, did not respond to a request for comment.
Wachtell had been defending Twitter’s interests for several months after Musk initially announced his withdrawal from the deal. Ultimately, Musk chose to proceed with the acquisition shortly before a scheduled trial in Delaware, where a judge would have determined whether he could abandon the purchase.