A group of former Twitter executives who were fired by Elon Musk on his first day in charge are suing the company for more than $ 1 million over unpaid legal bills.
The lawsuit filed in Delaware Chancery Court, on Monday April 10, is on behalf of the social media network’s former chief executive Parag Agrawal, its former chief financial officer Ned Segal and former head of legal and policy Vijaya Gadde.
They spent more than $1million in personal legal bills related to government investigations, including by the Department of Justice, inquiries by the Securities and Exchange Commission (SEC), and shareholder lawsuits.
The trio, who were fired by Musk when he bought Twitter for $44billion in October, racked up ‘significant expenses’ related to their former positions.
They claim the company has ‘refused to acknowledge its obligations and to remit payment of any invoices’.
The justice department contacted counsel for Agrawal and Segal in 2022 ‘regarding certain investigations related to the company’, according to the lawsuit.
But the nature of the probe and whether it is still active is unknown.
The pair also incurred legal expenses responding to inquiries by the SEC in 2022, the lawsuit states.
The SEC has been investigating whether Musk breached securities regulations by failing to make timely disclosures when he bought a 9.2 per cent stake in Twitter early last year.
Agrawal and Segal were contacted by federal authorities in July while still in their roles at Twitter and in September, the SEC asked Agrawal to preserve documents.
They are also named with Gadde in a shareholder lawsuit and she was forced to pay legal fees related to her February testimony in front of the House Committee on Oversight and Accountability.
The lawsuit said Twitter’s corporate bylaws and its contracts with former executives require it to pay their legal fees in matters related to the social media company. And the former executives notified Twitter of the expenses incurred more than two months ago but they are yet to be reimbursed.
Aaron Zamost, a spokesman for Segal and Gadde, said: ‘Once again, Twitter has failed to honor its contractual obligations to pay its bills.’
Musk has aggressively cut costs relating to Twitter since he took over and fired more than 75 per cent of its 7,500 employees.
He terminated Agrawal, Segal and Gadde ‘for cause’ last year which voided the large severance payouts they were expected to get, which would have amounted to nearly $60million for Agrawal.
