Ex-Twitter Executives Say Musk Still Owes Them $1.6 Million for Legal Bills

Jef Feeley, Bloomberg News

Elon Musk, billionaire and chief executive officer of Tesla, at the Viva Tech fair in Paris, France, on Friday, June 16, 2023. Musk predicted his Neuralink Corp. would carry out its first brain implant later this year. , Bloomberg

(Bloomberg) -- A group of Twitter Inc.’s former top executives say the struggling social-media platform owes them more than $1.6 million for legal fees and they want a judge to force new owner Elon Musk to pay that tab now.

The group – led by ex-Twitter Chief Executive Officer Parag Agrawal – says the legal bills accrued in connection with lawsuits and government probes of the company’s activities while they ran it. The former executives claim Twitter is violating its own bylaws by refusing to cover the sums. They were ousted when Musk bought the company for $44 billion last year.

“Over the better part of the past year, plaintiffs have tried and failed to make Twitter honor its advancement obligations,” their lawyers said Wednesday in a court filing. “Twitter invented evolving excuses for its non-payment of the full amounts owed.”

Agrawal, along with former chief counsel Vijaya Gadde and Chief Financial Officer Ned Segal, are asking Delaware Chancery Court Chief Judge Kathaleen St. J. McCormick to order Twitter to cover the expenses without holding a trial.

Twitter faces numerous suits alleging that the company under Musk’s leadership has failed to pay millions owed to former employees, vendors and landlords while purportedly trying to stay financially solvent.

Read More: Twitter Is Letting Bills Pile Up, and Lawsuits Are Coming, Too

Musk’s X Corp. this month sued the law firm that led the court fight to make him complete his takeover of Twitter, saying it took advantage of the company while running up a $90 million bill. The suit put some of the blame on “lame duck” executives at the social media platform, including Gadde, who Musk says went on a legal “spending spree” before he took control.

Twitter didn’t specifically respond to a request for comment on the legal-fee dispute. Delaware law generally favors advancement of legal fees on behalf of current and former executives of companies who are sued over their duties as officers or directors of the firms.

The company has paid about $600,000 of what it owes, but has withheld $1,158,427 in fees for lawyers’ work representing former top managers in a congressional inquiry into the influence of social media on US elections, which required Gadde to appear before the House Committee on Oversight and Reform, according to the filing.

The company also has failed to reimburse the group for $273,747 in fees tied with investigations by the US Department of Justice and the US Securities and Exchange Commission into Twitter’s practices, along with civil lawsuits, according to the filing. Musk also is refusing to cover $237,261 in fees generated by efforts to get them to cover the other legal bills.

Twitter also is facing several investor suits over the fallout from Musk’s purchase of the platform after his failed effort to scuttle the deal. Former employees have sued, too, claiming they were wrongfully denied promised stock grants after being laid off.

The case is Agrawal v. Twitter Inc., 2023-0409, Delaware Chancery Court (Wilmington).