Musk Can’t Dodge Payments To Ex-Twitter Execs He Fired, Judge Rules

Arthur T Knackerbracket has processed the following story:

Elon Musk's X Corp. has to pay $1.1 million in reimbursements for legal fees to former Twitter executives that he fired, including ex-CEO Parag Agrawal, a judge reportedly ruled yesterday. Delaware Court of Chancery Judge Kathaleen McCormick ruled against Musk's firm during a hearing yesterday, Bloomberg reported.

The former Twitter executives said that after being fired by Musk, the company now known as X refused to reimburse them for expenses related to federal investigations and civil lawsuits. The former executives' lawsuit filed in April said the company "has breached its obligations... by refusing to advance Plaintiffs' Expenses."

"After hearing arguments, McCormick noted Delaware courts lean in favor of granting executives' request to have legal fees covered when tied to their actions on behalf of companies. She said she didn't see any reason to deviate from the norm in the case," Bloomberg wrote.

McCormick is the same judge who handled the trial that forced Musk to complete the deal to buy Twitter that he tried to break last year. "I have reviewed the amount in question, and although it is high and probably higher than most humans would like to pay, it's not unreasonable," McCormick was quoted as saying yesterday. A written ruling wasn't available on the court website yet.

The lawsuit was filed by Agrawal, former Chief Legal Officer Vijaya Gadde, and former Chief Financial Officer Ned Segal. Musk fired the executives right after he completed the $44 billion purchase of Twitter in October 2022.

Their lawsuit said that Twitter's bylaws and agreements with executives required it "to indemnify Plaintiffs and advance all Expenses incurred in connection with any Proceeding in which Plaintiffs are involved by reason of their Corporate Status." The plaintiffs said they incurred legal bills related to inquiries by the US Securities and Exchange Commission Division of Enforcement and US Department of Justice; a securities class action filed against the company and its executives; a congressional inquiry into alleged "social media bias"; and other matters.

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