Ex-Twitter chiefs allege Musk dodged severance payments in lawsuit

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Elon Musk

5th March 2024 – (New York) Four former Twitter executives have initiated legal proceedings against Elon Musk, alleging the billionaire evaded paying over $128 million in severance dues following his takeover of the social media platform.

The claimants, which include ex-CEO Parag Agrawal, ex-CFO Ned Segal, ex-Chief Legal Counsel Vijaya Gadde, and ex-General Counsel Sean Edgett, contend in their lawsuit that their dismissals on the day Musk concluded his acquisition—which he later rebranded as X—were unwarranted.

The plaintiffs assert that Musk fabricated “fake cause” for their termination in an effort to avoid fulfilling severance obligations. The lawsuit, lodged on Monday in the Northern District of California, accuses Musk of a broader pattern of non-payment, citing numerous lawsuits from former Twitter employees who were let go en masse without severance.

According to the legal complaint, Musk’s leadership has transformed Twitter into an entity that routinely defaults on payments to employees, property owners, and suppliers, with Musk allegedly using his financial and influential clout to bulldoze over any dissent.

The former Twitter leaders claim that their severance packages guaranteed them a year’s salary in addition to stock awards, which should be valued at the price of Twitter at the time of the acquisition, when Musk purchased the firm for $44 billion, or $54.20 per share.

The lawsuit details that the grounds for their termination, according to Musk, were “gross negligence and willful misconduct”, specifically relating to payments made to outside attorneys involved in closing the acquisition deal. The former executives argue that these payments were necessary and part of their duty to the company.

The documentation further highlights the large number of legal disputes X is currently facing over unsettled invoices. It suggests that Musk’s reaction to these legal challenges has been dismissive, with reports indicating his response has been to simply “let them sue.”