Twitter's ex-CEO and other former top executives at the company now known as X Corp. have filed suit against Elon Musk, accusing the billionaire of allegedly violating federal law by denying them $200 million in severance they say they were owed when Musk dismissed them after buying Twitter.
On March 4, former CEO Parag Agrawal, former CFO Ned Segal, Chief Legal Officer Vijaya Gadde and General Counsel Sean Edgett filed a lawsuit in San Francisco federal court.
The complaint centers on actions Musk took after purchasing Twitter for $44 billion.
The complaint accuses Musk of allegedly timing the closure of the deal and the subsequent firing of Twitter's former leadership team to prevent their stock options from vesting, in a bid to "cheat" them out of their severance benefits, and potentially save his new company $200 million.
According to the complaint, Musk took those actions to exact revenge against Twitter's executives for filing suit to force Musk to follow through on his intent to purchase Twitter, after he attempted to back out of the deal.
However, the plaintiffs assert federal law protects those benefits still, even though Musk allegedly fired them "for cause," in at least one instance, moments before they resigned. They assert the benefits that Musk and X Corp. have refused to pay were approved by Twitter's former board before Musk took over the company.
The plaintiffs seek a court order requiring Musk and X Corp. to pay them the $200 million in unpaid severance, plus attorney fees and interest, and penalties of $110 per day since Dec. 29, 2022, until the date the defendants turn over certain documents to the plaintiffs, which they claim are being improperly withheld.
Plaintiffs are represented by attorneys David L. Anderson, Sheila A.G. Armbrust, Nicole M. Ryan, Sarah E. Gallo, Chaddy Georges and Mark B. Blocker, of Sidley Austin, of San Francisco and Chicago.