A group of former senior executives of Twitter is suing Elon Musk and X Corp., alleging they are entitled to unpaid severance payments totaling more than $128 million.
The group of former executives includes former CEO Parag Agrawal, Chief Financial Officer Ned Segal, Chief Legal Counsel Vijaya Gadde, and General Counsel Sean Edgett.
They claim in their lawsuit filed on Monday that they were fired without reason after Musk completed his purchase of Twitter, which he later renamed X.
The lawsuit claims that Musk didn’t want to pay them the severance they were owed, so he “made up [a] fake cause and appointed employees of his various companies to uphold his decision.”
The suit, filed in federal court in the Northern District of California, also claimed that Musk has a pattern of doing this, noting he has faced “droves” of suits by former Twitter employees who did not receive severance after he terminated them.
“Under Musk’s control, Twitter has become a scofflaw, stiffing employees, landlords, vendors, and others,” the lawsuit says. “Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him.”
The former executives claim they are entitled to one year’s salary plus unvested stock awards valued at Musk’s acquisition price of $44 billion as part of their severance plans.
According to the lawsuit, the only cause that Musk gave for firing the executives was “gross negligence and willful misconduct.”
The group says this was partially because Twitter paid fees to outside attorneys for their work closing the purchase of the company. However, they claim that they were required to pay the fees to comply with their fiduciary duties to Twitter.
“If Musk felt that the attorneys’ fees payments, or any other payments, were improper, his remedy was to seek to terminate the deal - not to withhold executives’ severance payments after the deal closed,” the lawsuit said.
The suit adds that X is currently facing a “staggering” amount of lawsuits regarding the company’s unpaid bills. But it added that X doesn’t appear to be making efforts to prevent the lawsuits.
“Consistent with the cavalier attitude he has demonstrated towards his financial obligations, Musk’s attitude in response to these mounting lawsuits has reportedly been to ‘let them sue,’” the suit said.