Elon Musk sues Wachtell to recoup fees from the Twitter buyout

Elon Musk has sued the prestigious legal firm Wachtell, Lipton, Rosen & Katz to recoup the majority of a $90 million (about Rs. 743 crore) fee paid by Twitter for rejecting his effort to walk away from his $44 billion (approximately Rs. 3,37,465 crore) takeover of the social media giant.

Musk's X Corp, which owns Twitter, filed the case on Wednesday in the California Superior Court in San Francisco.

Musk accused Wachtell of manipulating Twitter by receiving big "success" bonuses doled out by leaving Twitter executives who were happy that Musk would be forced to shut in the last days before the Oct. 27, 2022, buyout closed.

The world's richest individual, who also owns Tesla and SpaceX, branded the $90 million (approximately Rs. 743 crore) award "unconscionable," considering that Wachtell had billed less than one-third of that amount for its work on the Delaware litigation.

According to the lawsuit, "Wachtell arranged to effectively line its pockets with funds from the company cash register while the keys were being handed over" to Musk.

Musk is seeking to reclaim "excess" costs charged by Wachtell under an agreement signed on the day of the closure by one of its partners and Twitter's chief legal officer, Vijaya Gadde.

According to the lawsuit, when former Twitter director Martha Lane Fox saw how much attorneys would be paid, she emailed general counsel Sean Edgett, "O My Freaking God."

Wachtell did not reply to demands for comment right away. The case does not include Gadde, Fox, or Edgett.

Since Musk's takeover, Twitter has been ensnared in a spate of real or threatened lawsuits.

Many lawsuits have been filed against Musk by landlords, vendors, and consultants, as well as a threatened lawsuit by Twitter against Mark Zuckerberg's Meta Platforms over the latter's new Threads programme.

Wachtell is no stranger to billionaire buyout disputes, having spent years battling Carl Icahn over his aggressive purchase of CVR Energy in 2012.

In 2018, a judge denied Icahn's malpractice claim, which deemed him obligated to pay banks that assisted CVR in defending itself against the takeover more costs than if the merger had failed.

The case is X Corp v Wachtell, Lipton, Rosen & Katz, No. CGC-23-607461, California Superior Court, County of San Francisco.