Elon Musk sues law firm over "gargantuan" payout from Twitter

Elon Musk’s lawyers have taken legal action against law firm Wachtell, Lipton, Rosen & Katz. The firm had represented Twitter during a court case regarding Musk’s takeover bid last year.

The lawsuit claims that Wachtell obtained an excessively large payment from Twitter for their services.

Musk’s company, X Corp, which owns Twitter, filed the complaint in the California Superior Court in San Francisco on Wednesday.

Wachtell was initially hired by the previous management of Twitter to enforce Musk’s agreement to acquire the company. Musk had initially considered backing out of his offer to take Twitter private for $44 billion.

Wachtell represented Twitter during the legal battle with Musk, which lasted for four months. Ultimately, the law firm played a crucial role in finalizing the deal, and Musk acquired the company on October 27, 2022.

During the court proceedings, Twitter had agreed to pay Wachtell on an hourly basis.

Upon the completion of the acquisition, the law firm, however, received an enormous success fee of $90 million. Musk criticized this payment, deeming it “unconscionable” and a breach of both the law firm’s ethical obligations and California law.

According to the complaint, Wachtell took advantage of the situation, fully aware that no one was closely monitoring Twitter’s financial well-being.

They allegedly used this opportunity to enrich themselves at the company’s expense while the ownership was being transferred to Musk and his parties.

Musk is now seeking to recover any excessive fees and attorney charges that Wachtell billed. The law firm has not yet responded to media inquiries regarding the lawsuit.

Twitter itself is currently facing several lawsuits that claim under Musk’s leadership, the company allowed significant unpaid expenses to accumulate for former employees, vendors, and landlords.

Just recently, Twitter issued a warning of a potential lawsuit against Meta Platforms, headed by Mark Zuckerberg. Twitter views Meta’s newly launched text-based companion to Instagram, called Threads, as a copycat product.