Tesla CEO Elon Musk appears in court in San Francisco, California, USA on Tuesday, January 24, 2023.
Malena Sloss | Bloomberg | Getty Images
Elon Musk’s attorneys said this week that the law firm that represented Musk when he tried to take Twitter private last year was overcharging the firm for the work. filed a lawsuit for
Wachtel, Lipton, Rosen & Katz, which was Twitter before Musk’s acquisition, racked up $90 million in legal fees “at the last minute,” according to the lawsuit.
Wachtel represented Twitter after Musk backtracked on an initial offer to take Twitter private for $44 billion. The law firm helped close the deal in November 2022 and was paid a $90 million fee for securing the deal, which was bid significantly above Twitter’s open market valuation.
Twitter’s holding company, X Corp., is seeking “payment of related overage fees” and reimbursement of attorneys’ fees related to litigation costs. Musk’s firm is represented by Reed Collins & Tsai, a litigation firm based in Austin, Texas.
Lawyers for Reed Collins and Wachtel did not respond to requests for comment.
This isn’t the first time Musk has tried to block compensation payments to Twitter’s vendors. After Musk took over Twitter and left it $13 billion in debt, the company was sued at least 26 times for vendor nonpayment, according to Plainsite, an online legal records database.company stopped paying rent At its San Francisco headquarters, reportedly refuse pay Google For the use of cloud infrastructure.
The latest lawsuit is against one of America’s leading law firms. Wachtel, who has represented dozens of companies and investment vehicles in similar deals, pitched representation rights to Twitter in June 2022.
Wachtell partner Ben Roth said senior Twitter executives were “very interested in making preparations on behalf of Twitter” for Musk’s possible termination of the deal. wrote in an email to Among the executives involved in Mr. Wachtel’s involvement were a former general counsel and former chief financial officer of Twitter.
Musk’s attempt to pull out of the deal with Twitter was highly unusual and ultimately unsuccessful. He claimed the company failed to properly disclose the number of spam and fake accounts on its platform after agreeing to his deal. Twitter sued Musk for failing to keep its promises to shareholders, but Musk eventually relented and bought Twitter for the agreed price.
The lawsuit is before the Delaware Supreme Court, which is set up to deal with corporate lawsuits. Part of Wachtell’s pitch to her Twitter was a finesse in a Delaware court.
The case is X Corp v. Wachtell, Lipton, Rosen & Katz, California Superior Court (San Francisco County), Case No. CGC-23-607461.
— CNBC’s Lora Kolodny contributed to this report
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