Suing the lawyers who already (figuratively) kicked his ass sounds like a good idea to me!
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And some fools still keep pretending that this angry, incompetent, petty loser is somehow a brilliant, world-changing titan of industry. If I had any Tesla stock, I’d dump it right now* because it’s clear that Musk is going to drag everything he touches down with him.
*) Tbh., if I had had any Tesla stock, I would have dumped it long ago, probably around the point he bought Twitter.
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The situation I find more amusing is the law firms that were still owed money by Twitter after ownership changed hands, and Musk didn’t pay their bills. I mean, who could have foreseen such an outcome?
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Wait… so now not only is he not paying current bills the money he owes them, but he’s also trying to retroactively not pay bills from before he was owner of the company? Well, I guess that technically counts as requiring 4D moves, but somehow I don’t think this will work out well. Or at all.
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He’s suing the attorneys who won the case for overly-adequate legal representation. He’s probably going to end up paying their legal bills.
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That violates the fiduciary duty, according to elno.
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That’s not quite what the lawsuit is about. I mean it clearly is why the lawsuit is happening but the claim is different.
Here’s what seems to be the filing:
There’s a whole bunch of repetition but it boils down to a claim that Wachtell sought and was granted a “success fee” without following the required rules for making those kinds of agreements with your client and that the Twitter execs didn’t care whether Wachtell was entitled to that kind of money, they were demob happy and just handing out what was soon to be Musk’s company’s money in breach of the Merger Agreement.
The claim is basically that Twitter hired Wachtell to act in the litigation on an hourly rate basis.
There were a couple of whopping great invoices totalling about $17 million and, I think, about another $11 million in WIP (work done but not yet billed) and then, so says Musk, Wachtell and the soon to be outgoing Twitter execs agreed to pay Wachtell a total of $90 million.
Allegedly this was done after all the litigation was over, indeed on the very day the deal was to close.
This would in fact be very naughty if true.
However Wachtell were also apparently doing M&A work.
It seems more likely to me that the arrangement was a blanket, “Here’s the total you have to pay” deal, wrapping up both the M&A work and the litigation fees.
On that basis the difference between the billed and WIP for the litigation and the $90 million wouldn’t be an unlawful contingency fee but an agreed payment for the non-litigation work.
I don’t know what California’s rules are like as to setting the fees for that kind of work but usually the rules in that regard are much more relaxed.
Given that Musk’s team have put everything on this being an unlawful contingency fee, I suspect they think they’d get nowhere trying to quibble about $70 million odd for M&A fees deal of this size.
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So what stops the seller from paying the lawyers twice that amount?
Conflict of interest. A law firm cannot represent both the buyer and the seller in a deal, no more than a lawyer can he both the defense and prosecuting attorney in a criminal case.
If the firm did, they could lose both their license(s) to practice, as well as their reputation would be shot. No reputable law firm is going to take that risk, especially not for Elongated Muskrat.
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Normally the merger agreement includes a term requiring the Seller to carry on business as normal prior to the merger and not run it into the ground, enter into onerous contracts, make major acquisitions or otherwise fuck the buyer over by poisoning the company.
Musk says this agreement had such terms and that Twitter’s execs breached it by agreeing the massive payment to the lawyers (question therefore: why not pursue the execs for breaching their duty to the company?).
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Additional info, links:
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