Elon Musk Faces Legal Setback In Court Battle Over Twitter Severance Payouts

Elon Musk encountered a major legal hurdle as a US judge ruled that claims brought by former Twitter Inc. executives regarding severance entitlements may proceed.

The court’s decision late on Friday permits former Chief Executive Parag Agrawal, along with top executives including Vijaya Gadde, Ned Segal, and Sean Edgett, to pursue compensation allegedly withheld during Musk’s acquisition of Twitter in 2022.

This case centers on allegations that Musk dismissed these high-ranking officials as he finalized his $44 billion takeover, preempting their ability to resign and claim severance formally.

The lawsuit, filed by Agrawal and his fellow former executives in March, references a statement attributed to Musk in Walter Isaacson’s recent biography.

According to the biography, Musk is quoted as noting a “200-million differential in the cookie jar between closing tonight and doing it tomorrow morning,” suggesting urgency in his actions as he neared the Twitter acquisition’s completion.

The court’s ruling on Friday from US District Judge Maxine Chesney dismissed arguments by Musk’s legal team to throw out Agrawal’s claims.

Agrawal and his colleagues are seeking severance benefits amounting to one year’s salary plus the value of unvested stock awards calculated at the acquisition price.

Notably, Musk’s legal battles over severance are not limited to these executives; they form part of a broader pattern of claims from thousands of former Twitter employees.