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The
complaint by Musk's X Corp, which owns Twitter, was filed on
Wednesday in the California Superior Court in San Francisco.
Musk accused Wachtell of exploiting Twitter by accepting, in the
final days before the Oct. 27, 2022, buyout closed, huge
"success" fees doled out by departing Twitter executives who
were grateful that Musk would be forced to close.
The world's richest person, who also runs Tesla Inc and SpaceX,
called the $90 million payout "unconscionable," given that
Wachtell had billed less than one-third that sum for its few
months of work on the Delaware lawsuit.
"Wachtell arranged to effectively line its pockets with funds
from the company cash register while the keys were being handed
over" to Musk, the complaint said.
Musk wants to recoup "excess" fees that Wachtell charged under
an agreement signed on the day of closing by one of its partners
and Twitter's chief legal officer Vijaya Gadde.
The complaint also quoted former Twitter director Martha Lane
Fox who, upon learning how much lawyers would be paid, emailed
general counsel Sean Edgett: "O My Freaking God."
Wachtell did not immediately respond to requests for comment.
Gadde, Fox and Edgett are not parties to the lawsuit.
Twitter has been involved in a slew of actual or threatened
litigation since Musk's buyout.
These include many lawsuits by landlords, vendors and
consultants accusing Musk of stiffing them on bills, and a
threatened lawsuit by Twitter against Mark Zuckerberg's Meta
Platforms over the latter's new Threads app.
Wachtell is no stranger to lawsuits by billionaires over
buyouts, having spent years litigating with Carl Icahn over his
2012 hostile takeover of CVR Energy.
In 2018, a judge dismissed a malpractice claim by Icahn, who
found himself on the hook to pay banks that helped defend CVR
against the takeover higher fees than if the merger failed.
The case is X Corp v Wachtell, Lipton, Rosen & Katz, California
Superior Court, County of San Francisco, No. CGC-23-607461.
(Reporting by Jonathan Stempel in New York; Editing by
Marguerita Choy)
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