Tesla and SpaceX CEO Elon Musk has lost a court battle against Twitter executives over severance pay claims.
What Happened: On Friday, U.S. District Judge Maxine Chesney ruled in favor of former Twitter CEO Parag Agrawal and other top executives, allowing their claims to proceed, reported Bloomberg.
The executives have alleged that Musk strategically fired them to avoid paying severance during the acquisition of Twitter in October 2022.
They alleged that they are owed severance benefits equal to one year’s salary plus unvested stock awards valued at the acquisition price.
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The complaint was filed in March and refers to a quote from Musk in Walter Isaacson’s biography, suggesting a $200 million difference in severance payments if the deal closed a day earlier.
Since acquiring Twitter for $44 billion and rebranding it as X Corp, Musk has been dealing with legal claims for back pay by thousands of Twitter employees he laid off.
Earlier this year in September, one former employee was awarded unpaid severance in a closed-door arbitration, the report noted.
Judge Chesney is also overseeing two other suits brought by Twitter executives, including one by Nicholas Caldwell, who is seeking $20 million for lost severance.
On Friday, Musk’s request to dismiss Caldwell’s claim was also denied.
Why It Matters: In July this year, Musk and his rebranded social media company successfully defended a lawsuit seeking $500 million in severance pay for thousands of employees laid off after the acquisition.
However, earlier this week it was reported that the company has been hit with a new wave of layoffs, particularly in the engineering department.
Moreover, the value of X has also come under scrutiny, with Fidelity valuing the platform below $10 billion in October, a significant drop from the amount Musk paid for the acquisition.
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