Parag Agrawal, the former CEO of Twitter who was fired by Elon Musk, is suing the social media company for failing to pay his legal bills. He was sacked and escorted out of Twitter’s San Francisco headquarters the day after Mr. Musk completed his $44bn takeover. Along with other executives, his employment was ended “with cause” after he accused them of misleading him and investors about the number of fake user accounts on the social network platform. Mr. Agrawals is now suing the company for not paying $1m in personal legal expenses as it battles investigations by American authorities.
Twitter has become embroiled in various disputes since Mr. Musk's takeover, including with the Federal Trade Commission (FTC) and their San Francisco landlord. The company has filed a lawsuit with the Delaware Court of Chancery claiming that three former executives – Parag Agrawal, Vijaya Gadde, and Ned Segal – have not paid back $1 million in legal fees they owe to Twitter for expenses incurred in connection with several proceedings they face due to their former roles.
The lawsuit alleges that Twitter agreed to indemnify these execs but failed to uphold those agreements: "The majority of these legal fees are owed to Vijaya Gadde," said an insider familiar with this matter, "who spent $1.1 million on legal costs related to her Congressional testimony back in February."
Former senior executives from multiple departments within Twitter have joined forces against their previous employer over unpaid bills totaling more than one million dollars; alongside Parag Agrawal stand Vijaya Gadde - Chief Legal Officer - and Ned Segal - CFO.
"The SEC [Securities Exchange Commission] is currently investigating whether Musk breached regulations by delaying disclosure regarding his initial 9.2% stake acquisition," explained another source close to this case; adding further that the two former executives managed to rack up these legal expenses while dealing with and complying to various demands made by regulatory authorities and other stakeholders.
In a separate but related case, four companies have filed a class-action lawsuit against Twitter for breach of contract. The plaintiffs allege unpaid invoices ranging from marketing fees for branded merchandise to rent for office spaces used by Twitter employees. Since taking over in late November 2021, Elon Musk has been on a cost-cutting spree: laying off most of the company's workforce, reducing employee benefits such as free food, and even auctioning off official Twitter merchandise.
Among the claimants is White Coat Captioning who alleges outstanding debts amounting to more than $41,000; their ten approved yet overdue invoices were acknowledged by Twitter but remain unpaid without any clear indication if or when payment will be settled.
The four companies are suing Twitter not only for reimbursement but also demand trial by jury as they seek justice in what they perceive as an unfair treatment under Elon Musk's management.