Elon Musk has sued the law firm that led The Court fight to make him complete his Twitter takeover, saying it profited from the company while running a $90 million bill.
Wachtell Lipton Rosen & Katz, among the most profitable companies in the United States, had a brief and vulnerable run as Musk was closing a $44 billion deal, according to a complaint filed in San Francisco state court by Musk’s X Corp. , now the parent company. Twitter.
Twitter agreed to pay Wachtell’s lawyer on an hourly basis to enforce Musk’s agreement to buy the company when he tried to back out, but the company violated its ethical duties as well as California law in the final days of its four-month representation when he requested a “massive” bonus fee, according to the complaint.
The lawsuit is something of a role reversal for Musk, the defendant in Many suits Under his leadership, Twitter allegedly allowed millions in unpaid expenses to accrue from former employees, sellers, and landlords while allegedly trying to keep the company financially solvent.
Representatives for Wachtell, including William Savitt, who played a leading role in last year’s Delaware Chancery court battle, did not immediately respond to a request for comment.
Twitter’s legal battle with Musk has involved dozens of lawyers on both sides for months, some of whom charge upwards of $1,000 an hour — leading Columbia law professor John Coffey to speculate that total legal fees could have exceeded $1 billion if the case had been prosecuted. to trial.
X Corp claims that by arranging for Twitter’s hourly billing rates rather than taking the case on an emergency basis, Wachtell “absolutely took no risk of getting its outsized success fee.” Furthermore, the company’s agreement with the law firm “does not even specify the amount of the success fee, let alone any formula or percentage used to arrive at that number,” according to the complaint.
The lawsuit also faulted the social media platform’s “lame duck” executives on a legal “spending spree” before Musk took control.
Fully aware that no one with an economic interest in Twitter’s financial well-being cared about the store, Wachtell arranged for his pockets to be effectively lined with money from the company’s cash register while handing over the keys to Musk’s party, according to the complaint.
The case is X Corp. v. Wachtell, Lipton, Rosen & Katz, CGC-23-607461, California Superior Court (San Francisco).
– With the help of Caroline Hyde