Elon Musk sues Wachtell law firm to recover fees from Twitter buyout

Elon Musk is seeking reimbursement for “excess” costs that Wachtell levied in accordance with a contract signed on the day of closure.

Elon Musk has filed a lawsuit against the prestigious law firm Wachtell, Lipton, Rosen & Katz in an effort to recoup the majority of the $90 million (approximately Rs. 743 crore) fee Twitter paid the firm for thwarting his attempt to back out of his $44 billion (about Rs. 3,37,465 crore) purchase of the social media giant. On Wednesday, Musk’s X Corp, which owns Twitter, filed a lawsuit in the San Francisco branch of the California Superior Court.

In the last days before the buyout’s closing on October 27, 2022, Musk accused Wachtell of taking advantage of Twitter by accepting hefty “success” bonuses offered by leaving Twitter executives who were happy that Musk would be forced to shut.


Given that Wachtell had billed less than one-third that amount for its brief period of work on the Delaware litigation, the world’s richest man, who also owns Tesla and SpaceX, dubbed the $90 million (approximately Rs. 743 crore) settlement “unconscionable.” Musk was handed the keys, but Wachtell “arranged to effectively line its pockets with funds from the company cash register,” according to the lawsuit. Musk is attempting to recover “excess” costs that Wachtell invoiced in accordance with a contract that Twitter’s chief legal officer Vijaya Gadde and one of its partners signed the day of the transaction.

The lawsuit included a remark from former Twitter director Martha Lane Fox who, upon discovering the amount of the legal fees, sent general counsel Sean Edgett an email with the subject line “O My Freaking God.” Requests for comment from Wachtell did not immediately receive a response. The case does not include Gadde, Fox, or Edgett as parties. Since Musk’s purchase, Twitter has been a party to a number of real or potential legal disputes. Among them are many lawsuits brought by suppliers, consultants, and landlords who claim that Musk has failed to pay his bills, as well as a threatened legal action by Twitter against Mark Zuckerberg’s Meta Platforms over the latter’s new Threads program.

With years of litigation with Carl Icahn over his aggressive purchase of CVR Energy in 2012, Wachtell is no stranger to lawsuits by billionaires over buyouts. Icahn’s malpractice claim was denied by a judge in 2018, and he was now responsible for paying banks that assisted in defending CVR against the takeover more costs than if the merger had failed.

California Superior Court, County of San Francisco, Case No. CGC-23-607461, X Corp v. Wachtell, Lipton, Rosen & Katz, is the venue for this dispute.