Elon Musk sues Wachtell, Lipton, Rosen & Katz for most of the $90 million fee received from Twitter, which prevented his $44 billion buyout withdrawal.
The complaint was filed in a California court, with Musk accusing Wachtell of taking advantage of the situation by accepting large “success” fees from departing Twitter executives.
Musk, the world’s wealthiest individual and CEO of Tesla and SpaceX, deemed the $90 million payout “unconscionable,” especially considering Wachtell’s significantly lower billing for their work on the Delaware lawsuit.
According to the complaint, “Wachtell arranged to effectively line its pockets with funds from the company cash register while the keys were being handed over” to Musk.
Musk has taken legal action against Wachtell, Lipton, Rosen & Katz, aiming to recover what they consider to be excessive fees charged by the law firm.
The fees were agreed upon by one of Wachtell’s partners and Twitter’s chief legal officer on the day of the buyout’s closing. The lawsuit quotes former Twitter director Martha Lane Fox, who expressed shock at the amount lawyers would be paid.
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Wachtell has not yet provided a response to the lawsuit. Various legal disputes have arisen for Twitter since Musk’s acquisition, including lawsuits from landlords, vendors, and consultants claiming unpaid bills, as well as a potential lawsuit by Twitter against Meta Platforms over its Threads app.
Wachtell has previously been involved in litigation with billionaire Carl Icahn over a hostile takeover. In 2018, a judge dismissed Icahn’s malpractice claim.
The case in question is X Corp v. Wachtell, Lipton, Rosen & Katz, filed in the California Superior Court, County of San Francisco, No. CGC-23-607461.