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According to a complaint filed by the landlord, Twitter Inc., under new owner Elon Musk, stopped paying rent on its San Francisco headquarters in December.
The social network corporation failed to pay the $3.36 million December rent for its offices at 1355 Market Street, as well as the $3.42 million January rent, according to a complaint filed Monday in state court in California by Sri Nine Market Square LLC, the building’s owner.
Since taking over Twitter, the billionaire has cut expenditures. He’s sacked half the workers, refused to pay rent on the company’s other locations across the world, and refused to pay certain outstanding payments, such as a plane charter. These restrictions come as Musk prepares to make his first payment on the $12.5 billion debt he took on to purchase Twitter.
The claim also comes as Musk is testifying in a securities fraud trial in San Francisco, where he is defending his plan to take Tesla Inc. private. He is scheduled to return Tuesday to complete his testimony.
According to the complaint, Twitter rents about 460,000 square feet of space on eight floors of the San Francisco skyscraper. Sri Nine Market Square maintained a $3.6 million letter of credit as collateral, which Twitter was supposed to enhance to $10 million if there was a change in management, which occurred when Musk purchased the firm in October for $44 billion.
According to the complaint, Twitter said it was not required to increase the line of credit.
Sri Nine stated that it used the existing line of credit to cover the December rent of $3.36 million and a portion of the January rent, leaving the line of credit balance at $1.
Sri Nine is seeking the overdue rent as well as a judicial ruling that Twitter is in breach of the agreement by failing to expand the line of credit to $10 million.
Twitter, which has abolished its public relations staff, did not reply to a request for comment.
The case is Sri Nine Market Square LLC v Twitter Inc., CGC-23-604136, Superior Court of California, County of San Francisco.