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Twitter faces lawsuit from former executives over unpaid legal fees

By Nithya Bose in Twitter/X News, posted April 11, 2023

Former Twitter executives, including ex-CEO Parag Agarwal, are accusing the company of failing to reimburse over $1 million in legal costs.

Mr. Agrawal has now filed a lawsuit against the social media giant in the Delaware Court of Chancery alongside the company's former CLO, Vijaya Gadde, and ex-CFO, Ned Segal.

They were among the top executives ousted by Elon Musk when he closed his takeover of Twitter last October.

The legal claims stem from a shareholder suit and investigations by the Securities and Exchange Commission and the Justice Department.

Twitter was charged with not fulfilling its obligation to pay legal expenses for any proceedings tied to their corporate roles, in the complaint.

The suit says lawyers for the former executives tried to get payment for expenses in January and then in March.

These costs include the investigation of factual claims, the research of legal theories, the development of defense, and other legal issues.

The complaint is another example of Twitter being sued for late payments since Mr. Musk took over the firm and worked quickly to cut costs.

Among others who filed for reimbursement were landlords, consultants, and suppliers, though some actions were later rejected.

The suit alleges Twitter’s corporate bylaws and contracts with the former executives require it to pay legal expenses for proceedings related to their one-time positions at the firm.

The executives argue they suffered legal costs due to multiple proceedings, including being named as defendants in the shareholder suit.

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They also had to pay for a subpoena issued by the House Committee on Oversight and Accountability to Ms. Gadde to appear at a congressional hearing in February.

Shortly after the purchase, Mr. Musk fired many top Twitter executives, including Mr. Agrawal, Ms. Gadde, Mr. Segal, and former general counsel Sean Edgett.

Mr. Musk said he sacked those executives for cause and was not obliged to provide them the expected multimillion-dollar severance pay.

Source: The Wall Street Journal

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