Former Twitter executives are suing Elon Musk and X Corp., claiming they are entitled to over USD 128 million in unpaid severance payments.
Twitter's former CEO Parag Agrawal, Chief Financial Officer Ned Segal, Chief Legal Counsel Vijaya Gadde, and General Counsel Sean Edgett allege in a lawsuit filed Monday that they were fired without cause on the day Musk completed his acquisition of Twitter, which he later rebranded as X.
Former Twitter officials sue Musk
According to the executives, Musk "made up a fake cause and appointed employees of his various companies to uphold his decision" because he refused to pay their severance money. As per the lawsuit, Musk has been sued by "droves" of former rank-and-file Twitter employees who were fired by Musk in large numbers and who claim that Musk's failure to pay their bills and severance is part of a pattern.
"Under Musk's control, Twitter has become a scofflaw, stiffing employees, landlords, vendors, and others," according to the lawsuit, filed in federal court in the Northern District of California. "Musk uses his wealth and power to bully anyone who disagrees with him; he doesn't pay his bills and thinks he is above the law." Musk and X's representatives did not immediately return messages seeking comment on Monday.
The former executives assert they are entitled to unvested stock awards valued at Twitter's acquisition price and a year's salary under their severance arrangements. Musk assumed leadership of the business in October 2022 after purchasing it for USD 44 billion, or USD 54.20 per share.
Lawsuit against Musk
They all claim that their firings were unjustified. "Cause" was defined strictly under the severance agreements, such as a criminal conviction, "gross negligence," or "willful misconduct." The lawsuit claims that Musk's only explanation for the terminations was "gross negligence and willful misconduct," partly because Twitter paid outside lawyers to complete the deal. According to the executives, to fulfill their fiduciary obligations to the company, they had to pay fees.
"Musk's remedy was to seek to terminate the deal—not to withhold executives' severance payments after the deal closed—if he felt that the attorneys' fees payments, or any other payments, were improper," the lawsuit states.
According to the lawsuit, X is facing a "staggering" amount of claims for unpaid debts. Musk has allegedly taken a flippant stance toward his financial obligations, which is consistent with his recent behavior of letting lawsuits pile up.
Image Source: X(Twitter)/Multiple Sources
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