In a legal battle that underscores the tumultuous aftermath of Elon Musk's takeover of Twitter, four former top executives, including Parag Agrawal, the previous CEO, have taken legal action against Musk, claiming he failed to honor severance agreements amounting to more than $128 million (R2.44 billion). The lawsuit, filed in federal court in northern California, alleges that Musk exhibited hostility towards them following his acquisition of the social media platform in 2022. Musk publicly declared his intention to withhold their severance payments as part of a larger effort to recoup funds from the acquisition deal, valued at $44 billion.
Under Musk's leadership, Twitter, now rebranded as X, has faced a barrage of legal challenges, including accusations of labor violations and non-payment of severance to laid-off employees. The company has also been accused of defaulting on payments to vendors and landlords while purportedly attempting to maintain financial stability.
In a scathing critique, lawyers representing Agrawal and the other former executives described Musk's management style as cavalier, alleging that he disregards financial obligations and operates with impunity due to his wealth and influence. Despite these allegations, representatives for X declined to comment on the matter, while Musk himself did not immediately respond to requests for comment.
Upon assuming control of Twitter, Musk swiftly terminated several other high-ranking executives, including Vijaya Gadde, the company's former top legal and policy official, Ned Segal, the former CFO, and Sean Edgett, the former general counsel. These dismissals were not unexpected, considering the executives' roles in Twitter's legal battles against Musk's attempted withdrawal from the acquisition deal.
Each of the ousted executives stood to receive substantial severance packages as part of the acquisition agreement, with Agrawal alone slated to receive approximately $50 million. However, legal disputes have ensued, with former executives securing a ruling requiring X to cover $1.1 million in legal fees incurred during their tenure.
Despite legal victories, challenges persist for X, as thousands of former Twitter employees continue to pursue claims of unpaid severance and bonuses. A San Francisco judge recently rejected X's attempt to dismiss a lawsuit alleging the company reneged on promises to pay bonuses to employees following Musk's acquisition of Twitter.
The legal battle between former Twitter executives and Elon Musk underscores the complexities and controversies surrounding corporate acquisitions and executive severance agreements in the tech industry, highlighting the need for transparency and accountability in corporate governance.
