A quartet of former Twitter top brass, inclusive of erstwhile leader Parag Agrawal, are bringing a lawsuit against business magnate Elon Musk, asserting he deprived them of over £98 million in redundancy compensation. The claimants assert this payout was unjustly withheld following Musk acquiring the social networking site.
The former executives comprising ex-legal head Vijaya Gadde, the company’s past General Counsel Sean Edgett, and ex-Chief Financial Officer Ned Segal, were let go by Musk immediately following his completion of the acquisition, valued at £33 billion, of the rebranded platform, X, in October of 2022.
Their termination was enacted “for cause” according to Musk, which annulled the astronomical redundancy packages – nearing £46 million in Agrawal’s case alone – they were slated to obtain. However, a lawsuit, launched on a Monday in California’s Federal Court against Musk and X, claims the stated reasons for their dismissals, primarily mismanagement and reckless professional behaviour, are entirely baseless.
The former executives were turfed for a multitude of stated reasons which include alleged corporate wastefulness and issues linked to employee retention bonuses. The court document filing asserts Musk’s dismissal for cause was a deceitful ploy to strip them of their redundancy benefits.
A spokesman for X refrained from commenting on the matter.
This legal action marks the latest surge in the bitter rivalry between Musk and the former chiefs of Twitter. Previously, Musk publicly lambasted their management of the platform multiple times and even attempted to abandon the acquisition and sue Twitter, causing the company to retaliate.
Additionally, in April of the last year, Agrawal, Gadde, and Segal took X to court for refusing to cover over £760,000 in personal legal costs, included those correlated to a probe commenced by the US Department of Justice.
The lawsuit also presents an extract from Musk’s biography penned by Walter Issacson. The author alleges Musk hastily wrapped up the acquisition with the aim of sacking the executives before they had the chance to either have their stock options mature, or step down voluntarily. Musk reportedly told Issacson: “There’s a £150 million discrepancy whilst closing tonight and proceeding tomorrow.”
The court filings on Monday reported that Musk was infuriated after Twitter sued him when he tried to pull out of the acquisition multiple times, forcing him to proceed with the deal. His frustration was targeted towards anyone involved in the merger’s legal dispute.
This lawsuit is the most recent in a series of legal and regulatory issues faced by Mr Musk and X, following his stern measures to regain control over the company’s financial situation last year. As part of this effort, he laid off several staff and declined to make payments to many of Twitter’s suppliers, property owners, and collaborators.
Mr. Musk is potentially facing collective action lawsuits for allegedly not providing complete redundancy payments to employees during widespread dismissals. Copyright The Financial Times Limited 2024
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