Elon Musk's X Faces $20M Lawsuit From Ex-Twitter Board Member Omid Kordestani Over Unpaid Shares

Omid Kordestani, a former board member of Twitter (now rebranded as X), has filed a lawsuit against Elon Musk‘s social media company alleging that they failed to cash out over $20 million worth of his shares.

What Happened: The lawsuit, filed in California Superior Court in San Francisco on Friday, accuses X of benefiting from Kordestani’s seven years of service to Twitter without compensating him, reported The New York Times.

The Iranian-American businessman, who joined Twitter’s board in 2015, played a significant role in the sale of the company to Musk in 2022. He received most of his compensation in stock. 

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However, after Musk’s acquisition, he allegedly refused to pay Kordestani for those shares, the report noted.

According to the lawsuit, Musk’s purchase agreement stipulated that Kordestani’s 800,000 stock options, worth over $20 million, should have been paid out within five days of the deal’s closure. However, this payment was allegedly not made.

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Why It Matters: Previously, former executives and thousands of employees have also sued Musk and his company, accusing the tech mogul of wrongful termination and refusal to pay proper severance.

Last month, Musk’s X Corp. won a $500 million severance lawsuit, where laid-off Twitter employees’ claims were not found to be covered under ERISA.

The Securities and Exchange Commission is also investigating Musk’s acquisition of Twitter, alleging that he failed to properly disclose purchases of the company’s stock before his takeover bid.

Musk is also facing a sexual harassment lawsuit filed by former SpaceX employees.

Earlier this month, the tech billionaire also reignited a legal battle against OpenAI, accusing ChatGPT-maker of prioritizing commercial gains over their original mission of benefiting humanity.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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