Three former Twitter executives, including the ex-CEO Parag Agrawal, are suing the social media platform owned by Elon Musk for failing to pay more than $1 million in personal legal expenses. These expenses include those related to an investigation by the US Department of Justice and the US Securities and Exchanges Commission.
The trio claims that Twitter has not acknowledged its obligations to cover their legal expenses and has refused to pay any invoices. It is unclear what the investigations were related to, and the DoJ did not immediately respond to a request for comment.
Companies usually cover the legal charges of executives related to their official positions. However, since Musk's acquisition of Twitter for $44 billion, he has been leading an aggressive cost-cutting effort to control the company's finances.
As a result, Twitter has faced various legal and regulatory challenges. In addition to the SEC and DoJ inquiries, the executives have been named in a class-action lawsuit against the company. Moreover, Twitter is being sued by its San Francisco landlord for not paying rent.
By terminating Agrawal, Segal, and Gadde "for cause" last year, Musk voided the large severance payouts they were expected to receive, which amounts to nearly $60 million in Agrawal's case. It is unclear if the executives plan to challenge the terms of their terminations in court.
This lawsuit sheds light on the turmoil that Twitter has faced since Musk's takeover, where the company is negotiating with or refusing to immediately pay some of its vendors, landlords, and partners, exposing the company to legal challenges. It remains to be seen how this legal dispute will play out and what impact it will have on Twitter's future.