Elon Musk Sues Elite Law Firm Over $90 Million Fee
Elon Musk has filed a lawsuit against top law firm Wachtell, Lipton, Rosen & Katz in the California Superior Court for San Francisco, alleging that the firm exploited his $44 billion buyout of Twitter by receiving a “success” fee of $90 million in the final days before the buyout closed.
Elon Musk has filed a lawsuit against top law firm Wachtell, Lipton, Rosen & Katz in the California Superior Court for San Francisco, alleging that the firm exploited his $44 billion buyout of Twitter by receiving a “success” fee of $90 million in the final days before the buyout closed.
Musk, who is the CEO of Tesla and SpaceX, claims that the $90 million figure is “unconscionable” when compared to the less than one-third of that sum ($28 million) that Wachtell had billed for its work on the Delaware lawsuit.
According to the complaint, the success fee was agreed upon by Wachtell partner and Twitter’s chief legal officer Vijaya Gadde on the day of the buyout closing, and was seen as “lining its pockets” by departing Twitter executives.
The lawsuit also mentions former Twitter director Martha Lane Fox, who expressed shock over the high success fee in an email to Twitter’s general counsel Sean Edgett, saying “O My Freaking God.” Fox, Gadde and Edgett are not parties to the lawsuit.
Twitter has been in the midst of a variety of legal disputes since Musk’s buyout, including lawsuits by landlords, vendors and consultants, as well as a threatened legal action from Twitter against Mark Zuckerberg’s Meta Platforms’ new Threads app.
Wachtell has experience with billionaires suing over buyouts, having spent years in court with Carl Icahn over his 2012 hostile takeover of CVR Energy. In 2018, a judge dismissed Icahn’s claim of malpractice, as he was found to be obligated to pay banks a higher rate for defending CVR against the takeover.