Elon Musk, the CEO of Twitter, has filed a lawsuit against law firm Wachtell Lipton Rosen & Katz, alleging that they took advantage of the company during its acquisition and ran up a bill of $90 million. Musk’s company, X Corp, which is now the parent of Twitter, claims that Wachtell violated its ethical duties and California law by soliciting exorbitant bonus fees in the final days of representing Musk. This lawsuit marks a role reversal for Musk, who is currently facing multiple lawsuits regarding unpaid expenses at Twitter. Representatives from Wachtell have yet to comment on the matter.
The legal battle between Twitter and Musk involved numerous lawyers on both sides, with fees reaching up to $1,000 an hour. Columbia University law professor John Coffee speculates that total legal fees could have exceeded $1 billion if the case had gone to trial. X Corp argues that Wachtell took no risk in obtaining its success fee, as they billed Twitter on an hourly basis instead of a contingency basis. The agreement between X Corp and the law firm does not specify the amount of the success fee or how it was calculated.
The lawsuit also criticizes Twitter’s “lame duck” executives for going on a legal spending spree before Musk took control of the company. X Corp claims that Wachtell took advantage of the chaotic transition to benefit financially.
The case, X Corp v Wachtell, Lipton, Rosen & Katz, is currently pending in the California Superior Court (San Francisco).
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