A group of former Twitter executives, including Parag Agrawal, Ned Segal, and Vijaya Gadde, who were terminated by Elon Musk on his first day as CEO, have filed a lawsuit in Delaware Chancery Court, alleging over $1 million in unpaid legal bills related to government investigations and shareholder lawsuits.
The executives claim that Twitter has failed to acknowledge its obligations and remit payment for incurred expenses. The lawsuit highlights that Twitter’s corporate bylaws and contracts with former executives require the company to cover legal fees in matters related to the social media platform. The executives notified Twitter of the expenses more than two months ago, but reimbursement has not been provided yet.
The lawsuit also mentions that the Department of Justice contacted Agrawal and Segal’s counsel in 2022 regarding certain investigations related to the company, although the nature and status of the probe remain unknown. The Securities and Exchange Commission (SEC) has also been investigating whether Musk breached securities regulations in relation to his purchase of a 9.2% stake in Twitter in early 2022, and Agrawal and Segal incurred legal expenses in responding to SEC inquiries.
Additionally, Agrawal, Segal, and Gadde are named in a shareholder lawsuit, and Gadde had to pay legal fees for her testimony in front of the House Committee on Oversight and Accountability in February.
The lawsuit emphasizes that Twitter’s failure to fulfill its contractual obligations to pay the legal bills of the former executives is a breach of its corporate bylaws and contracts. The executives assert that they have incurred significant expenses related to their former positions at Twitter, and Twitter’s refusal to reimburse them for the legal bills is in violation of their rights.
This legal dispute comes amidst Musk’s aggressive cost-cutting measures at Twitter, including the termination of over 75% of its employees and the voiding of severance payouts for terminated executives “for cause.” The outcome of the lawsuit will have implications for Twitter’s financial liabilities and contractual obligations to its former executives.