X Corp, formerly Twitter, must pay $1.1 million in legal fees incurred by several of the company’s former executives in the course of their employment. A US court in the Delaware Chancery Court decided this on Tuesday, as Bloomberg reports. X boss Elon Musk refused to cover legal fees after he took over Twitter for 44 billion in 2022.
A group of lawyers sued, including ex-Twitter CEO Parag Agrawal and former top lawyer Vijaya Gadde. They were able to convince Judge Kathaleen St J. McCormick that Twitter acted wrongly and breached its obligation to cover legal fees incurred while working for the company.
Acted out of revenge?
The costs, according to the plaintiffs, were incurred because of investigations into Twitter’s business activities. According to the company’s statutes, Twitter had to cover these expenses. This involves an outstanding amount of $1,158,427 for legal fees that were incurred as part of a congressional investigation into the influence of social media on the US elections. Gadde represented Twitter in this context. Only $600,000 was paid, but almost $1.2 million was withheld.
X justified his actions by saying that the bill was excessively high. In addition, it would not have been a representation in a legal dispute that would have dragged on for several years, but only for “one day of testimony.” The company’s current lawyer, Michael Blanchard, sees the legal bill as excessive. Twitter accused Gadde of acting in revenge for being fired from Twitter after the takeover.
Judge McCormick followed the statements of the former executives. The costs were incurred during her work for Twitter and must be paid accordingly. McCormick checked the amount. She justified her judgment by saying that it was very high, but not unreasonable.
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