Watch the video - Elon Sues The Lawyers That Forced Him to Buy Twitter by LegalEagle!
Short summary
Elon Musk is suing the law firm Wachtell, Lipton, Rosen & Katz, claiming they charged Twitter an unjust $90 million "success fee" during the company's $44 billion sale to him. This comes after Musk tried to back out of the sale, calling his offer too high. The disagreement focuses on Wachtell's switch from hourly to a success fee, which Musk argues was exploitative. While Wachtell defends their fees, Musk contends they were improper. Devin from Legal Eagle Services supports Wachtell's fees given the deal's size, but suggests Musk might have benefited from contesting the fee earlier.
Full Summary
đ Business Drama
Elon Musk is suing Wachtell, Lipton, Rosen & Katz (âWatchellâ), the law firm representing Twitter during its $44 billion sale to him. He claims the firm charged Twitter an unjust $90 million "success fee," which he now bears as Twitter's owner.
âď¸ Legal Dealings
The sale involved Musk, intending to take Twitter private, initially offering $54.20 per share. Musk tried to back out, claiming his offer was too high. Wachtell then sued Musk, ensuring the sale proceeded.
đ° Billing Controversy
The dispute lies in Wachtell switching from an hourly to a "success fee" structure towards the sale's conclusion, totaling $90 million. Musk claims this exploitation was not part of any initial agreement.
đľď¸ Justification & Argument
Wachtell defended their fees, based on successful deals' value. Musk contends the billing switch was improper and that Twitter's board acted against the company's best interest by accepting this fee.
đĽ Shareholders' Interest
The opposing perspective suggests the board executed their fiduciary duty by ensuring Musk bought Twitter at a high share price, maximizing shareholder value. The legal bill did not impact the shareholders' payout, thus Musk's discontent might be because he bore it.
âď¸ Contractual Implications
Musk's claim for unjust enrichment suggests he finds the fee agreement unconscionable. Yet, courts usually find contracts between fairly equal parties unconscionable only in extreme cases.
đ¨ Law & Unethical Practices
Devin discusses various cases of unfair practices such as exorbitant loan interest rates and prematurely expiring warranties. He emphasizes on cases that shock the conscience rather than relatively high legal bills resulting from litigation worth billions of dollars.
đŚ Legal Eagle Services
Devin promotes his law firm, the Eagle Team, offering a range of legal services such as car crashes, data breaches, and medical malpractice. They also help in finding appropriate legal representation.
đ° Mergers & Acquisitions
Devin notes Wachtell's reputation for charging significant success fees, defending the $90 million fee given the $44 billion deal.
đ Contract Disputes
Musk disputes Wachtell's role in the initial negotiation, claiming the legal work wasn't challenging, and other firms could have done the same work cheaper. Devin counters that had Musk upheld his initial agreement, Twitter wouldn't have paid a success fee.
âď¸ Legal Arguments
Musk argues that the $90 million success fee is unenforceable because it lacked "consideration" since the firm had already completed its work.
đ Fee Agreement Revision
Devin mentions that any advice Wachtell provided to Twitter before the deal closed could be considered "consideration" for the extra $90 million fee.
đ˘ Corporate Sabotage
Musk accuses the outgoing Twitter board of corporate sabotage, alleging they lined their own pockets knowing they were not accountable to Twitter's financial well-being.
đ Acquisition:
Devin suggests Musk might have been better off contesting the $90 million fees as irregular and refusing to proceed with the sale.
đ˝ď¸ Advertisement:
Devin then advertises Factor, a meal delivery service offering fresh, prepared meals. He concludes with a 50% discount code LEGALEAGLE50 for the first Factor box.
This summary was generated using AI. Please read PodSum's disclaimer for more information.
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