Elon Musk's X Corp has launched a dramatic legal offensive against four former Twitter executives, demanding the return of approximately $128 million in severance payments made during the chaotic $44 billion acquisition of the social media platform.
The Allegations: 'Gross Misconduct' and Financial Mismanagement
The lawsuit, filed in Delaware Chancery Court, targets former CEO Parag Agrawal, CFO Ned Segal, and top lawyers Vijaya Gadde and Sean Edgett. X Corp alleges these executives engaged in "gross misconduct" and approved "excessive" severance packages for themselves while the company was undergoing massive layoffs.
According to court documents, Musk's company claims the executives "orchestrated an elaborate scheme" to secure lavish exit packages despite their alleged failure to protect Twitter's interests during the acquisition process.
The Stakes: $128 Million Battle
The legal action seeks recovery of substantial sums:
- Approximately $128 million in total severance payments
- Damages for alleged breach of fiduciary duty
- Compensation for what X Corp calls "waste of corporate assets"
This lawsuit represents the latest escalation in Musk's ongoing battles with Twitter's previous leadership, whom he has repeatedly criticised since taking over the platform in October 2022.
Broader Implications for Corporate Governance
The case raises significant questions about executive compensation during corporate transitions and could set precedents for how severance agreements are handled in future high-profile acquisitions. Legal experts suggest this could become a landmark case in corporate governance disputes.
X Corp's aggressive legal stance underscores Musk's determination to challenge what he perceives as excessive corporate spending practices, even as his own management of the platform faces scrutiny from advertisers and users alike.
The outcome of this legal battle could have far-reaching implications for executive compensation standards across the technology sector and beyond.
