Elon Musk’s turbulent ownership of X, formerly Twitter, has taken another hit, this time in the form of a legal setback. A US District Judge, Maxine Chesney, has ruled in favor of former Twitter executives, including ex-CEO Parag Agrawal, allowing their claims for severance pay to move forward. This decision could potentially cost Musk a significant sum of money and adds to the mounting legal challenges he’s faced since acquiring the social media platform.
The executives, including Agrawal, have alleged that Musk strategically fired them to avoid paying their severance packages during the acquisition of Twitter in October 2022. They claim that they are owed severance benefits equivalent to one year’s salary plus unvested stock awards valued at the acquisition price. The complaint, filed in March, references a quote from Musk in Walter Isaacson’s biography, hinting at a potential $200 million difference in severance payments if the deal had closed a day earlier.
Since purchasing Twitter for $44 billion and rebranding it as X Corp, Musk has been grappling with various legal claims for back pay from thousands of Twitter employees he laid off. Earlier this year, in September, one former employee was awarded unpaid severance in a closed-door arbitration, highlighting the growing number of legal challenges Musk faces related to employee compensation.
Judge Chesney is also overseeing two other lawsuits brought by Twitter executives, including one by Nicholas Caldwell, who is seeking $20 million in lost severance. On Friday, Musk’s request to dismiss Caldwell’s claim was also denied, further solidifying the legal battle surrounding severance payments.
While Musk and X Corp successfully defended a lawsuit seeking $500 million in severance pay for thousands of employees laid off after the acquisition in July, the company has been hit with a new wave of layoffs, particularly in the engineering department. Additionally, the value of X has come under scrutiny, with Fidelity valuing the platform below $10 billion in October, a significant drop from the amount Musk paid for the acquisition.
This latest court battle adds another layer of complexity to Musk’s ownership of X, underscoring the ongoing challenges and legal hurdles he faces in managing the social media platform. The outcome of these cases could have significant financial implications for Musk and X Corp, potentially impacting the company’s future trajectory and the ongoing legal battles surrounding its acquisition.
