Elon Musk Files Lawsuit Against Wachtell Law Firm Over Dispute Over USD 90 Million Fee in Twitter Acquisition

Elon Musk has filed a lawsuit against prestigious law firm Wachtell, Lipton, Rosen & Katz in an attempt to reclaim a significant portion of the $90 million fee they were paid by Twitter. This fee was awarded to the firm for successfully preventing Musk from abandoning his $44 billion acquisition of the popular social media platform.

The complaint by Musk’s X Corp, which owns Twitter, was filed on Wednesday in a California court in San Francisco.

Musk accused Wachtell of exploiting Twitter by accepting in the final days before the Oct. 27, 2022, buyout decision and huge “success fees” paid to departing Twitter executives who were grateful Musk would be shut down.

The world’s richest person, who also runs Tesla Inc. and SpaceX, called the $90 million payment “palatable” because Wachtell had billed less than a third of that amount for a few months of work on the Delaware lawsuit.

“Wachtell effectively arranged to line his pockets with funds from the company’s coffers while the keys were handed over” to Musk, the complaint said.

Musk wants to recoup the “extra” fees that Wachtell charged under the deal, which was signed by one of its partners and Twitter’s general counsel, Vijaya Gadde, on the day of the closing.

The complaint also quoted former Twitter executive Martha Lane Fox, who, after learning how much the lawyers would be paid, emailed general counsel Sean Edgett: “Oh, crazy god.”

Wachtell did not immediately respond to requests for comment. Gadde, Fox and Edgett are not parties to the lawsuit. Twitter has been involved in numerous actual or threatened lawsuits since Musk’s purchase.

These include a number of lawsuits by landlords, vendors and consultants accusing Musk of stiffing bills, as well as Twitter’s threatened lawsuit against Mark Zuckerberg’s Meta Platforms over the latter’s new Threads app.

Wachtell is no stranger to billionaire takeover lawsuits, having spent years feuding with Carl Icahn over his 2012 hostile takeover of CVR Energy.

In 2018, a judge dismissed Icahn’s malpractice claim. Icahn had to pay banks that helped defend CVR against takeover fees as if the merger were to fall through.

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