Ex-Twitter execs sue for $1M in unpaid legal fees in battle with Musk

Three former Twitter executives have sued the company for more than $1 million in legal fees as they battle Elon Musk over millions of dollars in unpaid severance packages.

Parag Agrawal, Twitter’s ex-CEO, Vijaya Gadde, the former chief legal officer, and Ned Segal, the former CFO of the tech giant, sued in the Delaware Court of Chancery on Monday.

They were part of the senior management team that Elon Musk fired when he acquired Twitter nearly six months ago, The Wall Street Journal reported. 

Agrawal, Segal, and Gadde said in the complaint that the company’s obligation to cover their legal expenses remains in effect for any proceedings tied to their corporate roles, which they say have included a shareholder lawsuit and inquiries from the Securities and Exchange Commission and the Justice Department.

The three plaintiffs claimed that the company has “refused to acknowledge its obligations and to remit payment of any invoices”, after they personally incurred “significant expenses” responding to lawsuits and investigations related to their former positions, according to The Financial Times. 

Attorneys representing the former executives attempted in January and again in March to request payment for the expenses they incurred while investigating factual allegations, researching legal theories, developing a defense, and handling other legal matters, the lawsuit indicates. 

The suit is another allegation against Twitter for delayed payments, following Elon Musk’s takeover of the company and his cost-cutting strategies promptly cut costs. Court documents show that landlords, consultants, and vendors were among those who filed lawsuits for payment, although several of these cases have since been dismissed.

“Once again, Twitter has failed to honor its contractual obligations to pay its bills,” said Aaron Zamost, a spokesman for Ms. Gadde and Mr. Segal said. 

Twitter replied to The Journal’s emailed request for comment with an auto-reply of a poop emoji.

The tech titan’s corporate bylaws and contracts with the ex-executives obligate the company to cover their legal fees for proceedings related to their one-time roles at the company, The New York Times previously reported. Twitter is incorporated in Delaware and has its business headquarters in San Francisco.

The executives incurred legal expenses related to various proceedings, including a shareholder lawsuit and a congressional hearing where Ms. Gadde appeared in response to a subpoena from the House Committee on Oversight and Accountability in February.

The Justice Department representatives also contacted the counsel of Messrs. Agrawal and Segal last year concerning certain Twitter-related investigations. The complaint doesn’t elaborate on the inquiry.

Additionally, the SEC requested Mr. Agrawal to retain specific documents related to his work at Twitter, according to the complaint.

Musk stated that he terminated those executives with cause and was not obligated to provide them with the expected multimillion-dollar severance packages, according to the Journal.