Washington: In a legal battle unfolding, former high-ranking executives of Twitter are taking legal action against Elon Musk and X Corp., alleging they are owed over USD 128 million in unpaid severance payments. Parag Agrawal, former CEO of Twitter, along with Chief Financial Officer Ned Segal, Chief Legal Counsel Vijaya Gadde, and General Counsel Sean Edgett, filed a lawsuit on Monday claiming they were terminated without cause on the day of Musk’s acquisition of Twitter in 2022, which was later rebranded as X.
The executives assert that Musk fabricated reasons to avoid paying their severance, appointing employees from his various companies to support his decision.
According to the lawsuit, Musk has a history of not fulfilling financial obligations, having been sued by numerous former Twitter employees who were terminated without receiving severance.
“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,” the lawsuit alleges.
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Representatives for Musk and X based in San Francisco have not yet responded to requests for comment.
The former executives claim their severance packages entitled them to one year’s salary plus unvested stock awards at the acquisition price of Twitter. Musk acquired the company for USD 44 billion, or USD 54.20 per share, taking control in October 2022.
They argue that they were terminated without cause, as defined by their severance plans, which included specific criteria such as being convicted of a felony or engaging in “gross negligence” or “willful misconduct.”
The lawsuit claims that the only cause provided by Musk for the terminations was “gross negligence and willful misconduct,” citing Twitter’s payment of fees to outside attorneys involved in closing the acquisition. The executives assert that they were required to pay these fees to fulfill their fiduciary duties 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 contends.
The lawsuit also highlights X’s substantial number of lawsuits over unpaid bills, alleging that Musk’s response to these lawsuits has been indifferent.
