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The execs submitted a legal action in March, declaring that Musk reduced them off prior to they can officially tip down, hence refuting them their agreed-upon severance bundles.
A court ruled that previous Twitter magnates can seek their insurance claims that Elon Musk terminated them exactly at the time of the purchase’s closing to avoid severance responsibilities. (File Photo)
Elon Musk has actually come across a lawful trouble in his initiatives to prevent paying severance to Twitter’s previous elderly execs, that were disregarded throughout his 2022 purchase of the business. On Friday, a court ruled that previous chief executive officer Parag Agrawal and various other magnates can seek their insurance claims that Musk terminated them exactly at the time of the purchase’s closing to avoid severance responsibilities.
The execs submitted a legal action in March, declaring that Musk reduced them off prior to they can officially tip down, hence refuting them their agreed-upon severance bundles. They referenced Musk’s declaration to biographer Walter Isaacson, where he shared necessity in sealing the deal to prevent a “$ 200 million differential in the cookie container in between closing tonight and doing it tomorrow early morning.”
Alongside Agrawal, former legal head Vijaya Gadde, ex-CFO Ned Segal, and former general counsel Sean Edgett claim they are owed one year’s salary and unvested stock awards valued at the acquisition price.
This lawsuit adds to Musk’s extensive legal challenges related to employee compensation following his Twitter takeover, now rebranded as X Corp. After Musk implemented large-scale layoffs, many affected employees filed claims for unpaid severance, asserting that Musk had breached compensation agreements.
In July, Musk and X Corp. won a class-action lawsuit in which former employees sought $500 million in severance under the Employee Retirement Income Security Act. However, in a separate arbitration case in September, a former employee was awarded unpaid severance, which could set a precedent for similar claims.
U.S. District Judge Maxine Chesney, overseeing the case, also denied Musk’s motion to dismiss a related claim by Nicholas Caldwell, a former “core tech” basic supervisor that is looking for $20 million for shed severance.
