In a recent lawsuit filed in the Delaware Chancery Court, three former Twitter executives, including previous CEO Parag Agrawal, ex-chief legal officer Vijaya Gadde, and former CFO Ned Segal, are seeking to recover over $1 million in legal expenses. These costs were incurred while addressing shareholder lawsuits, federal investigations, and a congressional hearing. The complaint alleges that Twitter has not reimbursed them for their attorney fees, despite prior agreements made with the company. Elon Musk terminated their positions soon after acquiring Twitter.
Twitter has not provided a comment on the lawsuit, and the company significantly reduced its public relations team last year. The New York Times was the first to report on this complaint.
The legal filing reveals that Gadde alone spent over $1 million in preparation for her February testimony before the House Oversight Committee. The hearing centered on accusations that Twitter suppressed conservative voices. Legal expenses connected to investigations by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are also mentioned in the complaint, although specific details remain undisclosed. These references to federal investigations highlight the ongoing legal challenges Twitter faces under Musk's leadership, as he attempts to stabilize the company's finances and implement major product changes with a reduced workforce.
Previously, the SEC investigated Musk's investment in Twitter and his decision to acquire the company, particularly his apparent delay in disclosing his sizable ownership stake. Last month, the Federal Trade Commission confirmed an extensive inquiry into Twitter's privacy practices. The DOJ, however, has not publicly confirmed any investigation into the company.
The lawsuit provides some information about the DOJ and SEC investigations, claiming that Agrawal and Segal started receiving inquiries from US officials around July of the previous year. Agrawal continued to receive requests even after his departure from Twitter. According to the complaint, the DOJ contacted the attorneys of Agrawal and Segal late last year regarding multiple Twitter investigations.
Despite sending letters to Twitter requesting reimbursement for legal expenses, the company ignored these requests for months. In March, Twitter allegedly acknowledged the reimbursement requests but took no action to pay. As of the filing on Monday, the executives have not been reimbursed for their legal fees.
