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Recent Developments
Elon Musk, the world’s richest man and the owner of Tesla and SpaceX, took legal action against the law firm Wachtell,Lipton,Rosen& Katz. He claims that the law firm took advantage of the company while charging him an exorbitant $90 million bill.
Role of Wachtell, Lipton, Rosen, and Katz in Musk’s Twitter Saga
The firm represented Twitter during a court case related to his attempted takeover of the social media platform last year. Wachtell was initially hired by the previous management of Twitter to enforce his agreement to acquire the company. He had initially considered backing out of his $44 billion offer to buy Twitter and take it private.
Wachtell represented Twitter during its legal battle with Musk, which lasted for over four months. Eventually, the law firm played a crucial role in finalising the deal, and he was forced to acquire Twitter in October.
During the court proceedings, Twitter agreed to pay the firm on an hourly basis.
In the lawsuit filed, Elon Musk demanded the recovery of the charged $90 million from the firm, which he believes was given to the law firm for defeating his bid to walk away from his $44 billion bid for the social media platform, Twitter. Elon Musk had previously criticised the payment, deeming it unconscionable and a breach of both the law firm’s ethical obligations and California law. The law suit was filed in the California Supreme Court in San Francisco by X Corp., a company owned by Elon Musk that owns Twitter.
Musk’s allegations
He believes that the Wachtell firm took advantage of the situation by accepting huge remuneration from the departing Twitter executives, who were elated that he was compelled to complete the transaction. He alleged that the $90 million payment was too much considering the amount of work put in by the firm compared to the work done by its Delaware lawsuit.
The complaint stated that the firm ensured that they were heftily paid from the funds of the company cash register while Twitter was being handed over to Musk.
In his case, Elon Musk accused the company of exploiting Twitter, and he wants to get back the excessive fees that Wachtell charged him. According to him, one of Wachtell’s partners and Twitter’s chief legal officer, Vijaya Gadde, signed an agreement on the day the purchase closed, allowing the extra fees to be charged by him.
Reaction of Former Twitter’s Director
The complaint also mentioned former Twitter director Martha Lane Fox’s reaction, saying she was surprised by the amount charged by the law firm in the case. The complaint quoted Martha Lane Fox’s reaction as “Oh, my freaking God” when she got to know about the amount of money the firm was owed by Twitter.
Twitter is involved in a number of legal cases after the Musk buyout, including law suits by landlords, vendors, and consultants accusing Musk of stranding them on payment of bills, with the latest addition being the lawsuit filed by Twitter and Elon Musk against Mark Zuckerberg’s Meta Platform over its new app Threads, which resembles Twitter.
Wachtell’s history
Wachtell has dealt with several high-class billionaire clients. They were a part of the long legal battle with Carl Icahn over his takeover of CVR Energy in 2012.
Similar to Musk, Icahn also alleged malpractice on the part of Wachtell, but the case was dismissed by the court.
