Twitter’s former CEO sues over unpaid legal bills
Twitter’s ex-CEO Parag Agrawal and two different former executives are suing the Elon Musk-owned social media platform for failing to cowl greater than $1mn in private authorized bills, together with these associated to an investigation by the US Division of Justice.
Agrawal, Twitter’s former basic counsel Vijaya Gadde and Ned Segal, former chief monetary officer, have been fired by Musk when he acquired the platform for $44bn in October.
The trio declare that the corporate has “refused to acknowledge its obligations and to remit cost of any invoices”, after they personally incurred “important bills” responding to lawsuits and investigations associated to their former positions.
Based on paperwork filed in Delaware chancery court docket, the justice division contacted counsel for Agrawal and Segal “relating to sure investigations associated to the corporate”.
It’s unclear what the probes have been associated to or if they continue to be ongoing. The DoJ didn’t instantly reply to a request for remark.
Agrawal and Segal have additionally incurred authorized bills in relation to 2022 inquiries by the US Securities and Exchanges Fee, the lawsuit alleges. The SEC has been investigating whether or not Musk breached securities laws by failing to make well timed disclosures when he initially bought a 9.2 per cent stake within the firm early final yr.
Corporations usually cowl the authorized fees of executives associated to their official positions.
Musk has led an aggressive cost-cutting effort at Twitter so as to wrestle its funds beneath management. Advertisers have pulled again spending on the platform and the corporate is on the hook for $1.5bn of annual curiosity funds on $13bn of debt Musk used to fund the acquisition.
In addition to having performed mass job cuts, Twitter is both negotiating with or refusing to instantly pay a few of its distributors, landlords and companions, exposing the corporate to authorized challenges. Twitter is being sued by its San Francisco landlord for not paying lease, for instance.
By terminating Agrawal, Segal and Gadde “for trigger” final yr, Musk voided the massive severance payouts they have been anticipated to obtain — practically $60mn in Agrawal’s case. It’s unclear if the executives plan to problem the phrases of their terminations in court docket.
Monday’s lawsuit particulars Twitter’s numerous authorized and regulatory woes since Musk first made his bid to take over the corporate. On high of the SEC and DoJ inquiries, the executives have been named in a class-action lawsuit in opposition to the corporate, whereas Gadde testified earlier than the Home Committee on Oversight and Accountability at a listening to in February into content material moderation on the platform.
Individually, Twitter has confronted calls for from the Federal Commerce Fee for the reason that acquisition to share inside communications associated to Musk and to its enterprise practices, in line with a report by the Republican-led Home Judiciary Committee.
Extra reporting by Stefania Palma and Sujeet Indap