Authored by Mary Prenon via The Epoch Times (emphasis ours),
Elon Musk, controlling owner of social media platform X (formerly Twitter), has agreed to settle a $128 million lawsuit brought by four former Twitter executives.
The settlement, announced on Oct. 8, presents a timeline and outlines specific details for the closure of the case. The exact terms of the settlement will remain private.
The original court documents, filed in March 2024 in the U.S. District Court for the Northern District of California in San Francisco, indicate that Twitter ex-CEO Parag Agrawal, former Chief Financial Officer Ned Segal, former Chief Legal Officer Vijaya Gadde, and former General Counsel Sean Edgett claimed that Musk withheld their severance pay after purchasing Twitter in 2022.
In the lawsuit, plaintiffs claimed that Musk originally agreed to buy Twitter for $44 billion but tried to back out of the deal when the stock market declined. Twitter then sued Musk to enforce the deal, and after several months, the deal closed at its original price.
“Defeated, but still determined to avoid his obligations, Musk then tried to recover some of what he paid by repeatedly refusing to honor other clear contractual commitments,” the plaintiffs claimed.
According to the lawsuit, some of those agreements included severance pay for Twitter’s top executives.
“Accordingly, most public companies provide their executives with severance benefits that include the value of ... unvested stock awards, as well as their salary and other benefits for a defined period of time, if they are terminated or constructively terminated following a change in control,” the plaintiffs claimed.
Court documents show that Musk began purchasing Twitter stock in January 2022, eventually accumulating about 5 percent of the company’s shares. By April 2022, he disclosed holding 9.2 percent of Twitter’s stock.
In the same month, Musk offered to buy Twitter at $54.20 per share—a 38 percent premium over the stock’s closing price on the day before his investment in Twitter was disclosed.
On April 25, 2022, Twitter, Musk, and his wholly owned entities X Holdings I Inc. and X Holdings II Inc. entered into a merger agreement with Twitter.
In August 2022, Musk and X agreed to settle a separate lawsuit filed by almost 6,000 former Twitter employees claiming that they were owed nearly $500 million combined in severance pay.
Musk and his attorneys also recently filed a motion to dismiss a lawsuit brought by the Securities and Exchange Commission (SEC) for his failing to file a beneficial ownership report with the federal agency in a timely manner. Under the Securities Exchange Act of 1934, the commission requires anyone acquiring more than 5 percent of a company’s common stock shares to file that report.
The SEC’s complaint contended that Musk underpaid by at least $150 million for his purchases of Twitter common stock during that period.
It alleged that because of his late filing of the beneficial ownership report, investors selling Twitter common stock between March 25, 2022, and April 1, 2022, did so at artificially low prices.
The Epoch Times has reached out to X for comment.