California: Former senior executives of Twitter have taken legal action against Elon Musk and X Corp. They claim that they are entitled to severance payments totalling more than $128 million.
Parag Agrawal, the former CEO of Twitter, along with the company’s Chief Financial Officer Ned Segal, Chief Legal Counsel Vijaya Gadde, and General Counsel Sean Edgett filed a lawsuit, claiming that they were fired without cause on the day Musk concluded the acquisition of Twitter in 2022. The company was later rebranded as X by Musk.
According to the executives’s accusation, Musk didn’t want to pay their severance. They said that, “Musk made up fake cause and appointed employees of his various companies to uphold his decision.”
As per the case, the severance and non-payment of bills is part of a routine by Musk, who is being sued by ‘droves’ of former rank-and-file Twitter employees for not getting severance after Musk fired thousands.
“Under Musk’s control, Twitter has become a scofflaw, stiffing employees, landlords, vendors, and others. Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him,” noted the lawsuit, filed in federal court in the Northern District of California.
The group of former executives are claiming that they were wrongly fired without cause by Twitter. They assert that their severance plans entitled them to receive one year’s salary along with unvested stock awards valued at the acquisition price of Twitter, which was $44 billion, or $54.20 per share, when bought by Musk in October 2022. According to them, the definition of ’cause’ was confined to specific circumstances such as a felony conviction, ‘gross negligence’ or ‘willful misconduct.’
The lawsuit said that Musk mentioned ‘gross negligence and willful misconduct’ as the only reason for the termination. This is largely due to Twitter paying fees to outside lawyers for their efforts to finalize the acquisition. The executives claim that they paid the fees to fulfil a fiduciary commitment to the company.
“If Musk felt that the attorneys’ fees payments, or any other payments, were improper, his remedy was to seek to terminate the deal — not to withhold executives’ severance payments after the deal closed,” the lawsuit stated. The lawsuit remarked that the X is facing ‘staggering’ lawsuits for unpaid bills. Musk has reportedly reacted with a cavalier attitude, saying ‘let them sue.’
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