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Judge’s Ruling Resolves Dispute Over Legal Expenses Amidst Acquisition
In a significant legal development, X, the platform formerly known as Twitter, has been ordered by Delaware Chancery Court Judge Kathaleen St. J. McCormick to pay $1.1 million in legal fees related to investigations surrounding the platform’s operations during Elon Musk’s acquisition last year. This ruling comes in response to allegations that Twitter failed to cover the legal expenses incurred by former CEO Parag Agrawal, former lead policy officer Vijaya Gadde, and other executives during this tumultuous period.
The court’s decision underscores the assertion that Twitter “violated its duties to cover legal expenses generated by their work for the company.” The case arose after Elon Musk assumed control of Twitter and subsequently terminated Agrawal and several other high-ranking executives. In response, Twitter initiated legal action against Musk for attempting to renege on his agreement for the $44 billion acquisition.
Elon Musk was ordered by a US judge to face most of a lawsuit claiming he defrauded former Twitter shareholders last year by waiting too long to disclose that he had invested in the social media company, which he later bought and renamed https://t.co/DSG0sCjt4g pic.twitter.com/0fj6fjukrB
— Reuters (@Reuters) October 3, 2023
In April, Agrawal and Gadde took legal action against X, alleging that the company had not fulfilled its obligation to pay their legal bills, including expenses related to Gadde’s appearance before the House Committee on Oversight and Reform. While X had only paid approximately $600,000 of the outstanding amount, Judge McCormick has now ruled in favor of the former Twitter executives.
Judge McCormick acknowledged that $1.1 million is a substantial sum but deemed it reasonable, stating, “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.”
