Elon Musk is suing the law firm Wachtell, Lipton, Rosen & Katz for $90 million in success fees they charged Twitter during the acquisition process. Musk believes this fee is excessive and unjust. The dispute stems from Musk's initial attempt to buy Twitter for $44 billion, his subsequent attempt to back out, and Wachtell's successful lawsuit to compel him to complete the purchase. Musk argues that the legal work wasn't particularly challenging, and the success fee is unwarranted. However, Wachtell may argue that they were renegotiating fees for their advisory role during closing, not changing the original agreement. The outcome of this legal battle remains uncertain.
Here are the key facts extracted from the text:
1. Elon Musk is suing the law firm Wachtell, Lipton, Rosen & Katz for charging Twitter $90 million in success fees.
2. Wachtell represented Twitter when the old owners sued Musk to follow through with the sale.
3. Twitter paid Wachtell $90 million in success fees, which Musk claims is unjust enrichment.
4. The law firm had an hourly fee arrangement with Twitter, but switched to a success fee structure on the eve of closing.
5. Wachtell's success fees are based on the value of the deal, typically ranging from 1% to 0.1% of the deal value.
6. Musk argues that the success fee is too high and that Wachtell's work was not particularly difficult.
7. Wachtell's partners make significant amounts of money from charging success fees.
8. Musk's complaint alleges that Wachtell's fee arrangement was not properly disclosed and that the firm changed its fee structure without consideration.
9. Twitter's board of directors approved the success fee payment despite Musk's directive to halt all payments.
10. Musk claims that the fee payment was made in secret and that Wachtell's work had already been done.
11. Wachtell could argue that its role in advising Twitter during closing constituted consideration for the success fee.
12. Musk's history of breaking contracts may weaken his argument.
13. Musk paid $44 billion for Twitter and now owns a company worth a fraction of that.
14. Wachtell was hired by Twitter after Musk tried to back out of the merger agreement.
15. The deal closed on October 28th, 2022, and Twitter paid Wachtell the success fee on the same day.