The $90-Million Mystery: Twitter Sues Top Law Firm In Acquisition Drama

Twitter’s acquisition saga takes an unexpected turn as the social media giant sues a top law firm, alleging unjust payments and a breach of fiduciary duty in the high-profile acquisition orchestrated by Elon Musk.

What Happened: In a surprising twist to the aftermath of Musk’s acquisition of Twitter, the microblogging site's parent company, X Corp., has filed a lawsuit against renowned corporate law firm Wachtell, Lipton, Rosen & Katz. 

Twitter alleged that the law firm received an unjust payment of $90 million related to the $44 billion acquisition, and demanded that the amount be returned, reported The New York Times. 

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The lawsuit was filed in San Francisco Superior Court and accused Wachtell Lipton of “unjust enrichment” by taking funds while the keys to the company were being handed over to the tech billionaire. 

According to documents submitted with the lawsuit, Twitter’s board and executives approved the $90 million payment to Wachtell Lipton based on their success in ensuring Musk honored his agreement to acquire the company. 

However, the lawsuit argued that by approving the payment, Twitter’s former executives and board breached their fiduciary duty, the report noted. 

It further alleges that the board rushed to close the deal without acting prudently or on an informed basis, ultimately leading to Musk’s swift termination of several top executives within minutes of Wachtell Lipton receiving the bulk of the fee. 

Why It's Important: Twitter’s previous management had engaged Wachtell Lipton’s services after Musk attempted to terminate the acquisition agreement. Despite his unsuccessful attempt, the purchase was finalized in October last year. 

Twitter has been embroiled in other fee disputes surrounding Musk’s acquisition as well.

Innisfree M&A, an advisory firm, sued Twitter in February for $1.9 million in unpaid bills, while in May, public relations firm Joele Frank filed a lawsuit claiming non-payment of approximately $830,498 for services rendered during the deal, the report noted. 

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