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Elon Musk Sues Law Firm Over Twitter Purchase

Elon Musk Sues Law Firm Over Twitter Purchase


In a surprising turn of events, Elon Musk, the enigmatic entrepreneur and CEO of various companies, finds himself at the center of a legal battle involving his acquisition of Twitter. The renowned law firm Wachtell, Lipton, Rosen & Katz, which had represented Twitter in the past, now faces a lawsuit from the social media giant under Musk’s ownership. This article delves into the intriguing details of the lawsuit, highlighting the events leading up to it and shedding light on Musk’s financial challenges as Twitter’s new owner.

The Agreement and Attempted Backtracking:

In 2022, Elon Musk agreed to acquire Twitter at $54.20 per share, but he soon attempted to backtrack on the deal. However, Musk’s legal position was not strong due to a “specific performance” clause included in the merger documents. Essentially, this clause implied that reneging on the deal could potentially lead to legal consequences, including a court order requiring Musk to fulfill the agreement and assume control of Twitter. Faced with an uphill battle in a Delaware court, Musk ultimately acquiesced and completed the acquisition on October 27, 2022.

The Allegations against Wachtell:

In the current lawsuit, Twitter, now under Musk’s ownership, alleges that Wachtell engaged in deceptive practices and took advantage of the social media company’s vulnerable position during the acquisition. The complaint suggests that Wachtell lawyers influenced Twitter’s former management to agree to pay a “success fee” if Musk successfully closed the deal. This fee, which forms part of the $90 million in fees arranged by Wachtell, allegedly burdened Twitter with substantial expenses before transitioning into Musk’s ownership. The lawsuit contends that departing executives at Twitter, lacking motivation due to the imminent sale, willingly authorized significant payments to Wachtell, further exacerbating the company’s financial liabilities.

Wachtell’s Response and Twitter’s Silence: Despite efforts to gather their side of the story, neither Wachtell nor William Savitt, a lawyer mentioned in the complaint, have provided a comment thus far. Additionally, Twitter’s limited communications department and executives have remained unavailable for further clarification. The absence of public statements from these parties adds to the intrigue surrounding the case.

Musk’s Financial Challenges as Twitter’s Owner:

Since taking over Twitter, Elon Musk has encountered a series of financial challenges. His leveraged buyout burdened the company with significant debt, requiring Twitter to allocate $1 billion annually for debt servicing. To offset these mounting bills, Musk made tough decisions, including downsizing Twitter’s workforce, introducing paywalls for certain features through the Twitter Blue subscription ($8 per month), and charging developers for API access, which had previously been free. Additionally, Musk employed unconventional methods to cut costs, such as denying proper severance to laid-off employees and neglecting rent payments for Twitter’s office spaces.

The Weight of a $90 Million Legal Bill:

Despite his resourcefulness in cost-cutting measures, Elon Musk is now faced with a substantial $90 million legal bill resulting from the alleged actions of Wachtell and Twitter’s former management. This financial burden presents a significant challenge for Musk, considering his reputation as a visionary entrepreneur rather than a meticulous corporate financial planner. As he grapples with these mounting financial pressures, Musk finds himself in search of any possible financial breaks to alleviate the strain.


Elon Musk’s acquisition of Twitter has taken an unexpected turn with the lawsuit against Wachtell, Lipton, Rosen & Katz. The legal battle sheds light on the intricate events leading up to the acquisition and the subsequent financial challenges faced by Musk as Twitter’s owner. With the outcome of this lawsuit yet to be determined, the industry watches closely to see how this story unfolds and what impact it may have on both Musk’s reputation and the future of Twitter under his stewardship.




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