Former CEO Parag Agrawal, along with two former executives, sued Twitter for failing to reimburse $1 million in expenses related to federal investigations and other legal matters. The former executives were fired after Chief Tweet Elon Musk took over the platform.
(Photo : Kevin Dietsch/Getty Images)
SUN VALLEY, IDAHO - JULY 07: Parag Agrawal, CEO of Twitter, walks to a morning session during the Allen & Company Sun Valley Conference on July 07, 2022 in Sun Valley, Idaho. The world's most wealthy and powerful businesspeople from the media, finance, and technology will converge at the Sun Valley Resort this week for the exclusive conference.
Suing Twitter
Twitter has been sued by former Chief Executive Officer Parag Agrawal, former Chief Legal Officer Vijaya Gadde, and former Chief Financial Officer Ned Segal after failing to reimburse legal fees, citing investigations filed in the Delaware Chancery Court by the Department of Justice and Securities and Exchange Commission.
Bloomberg reported that the executives spent more than $1 million on lawyers and other legal matters with the probes and lawsuits over their management of the company. The filing states that the company continues refusing to acknowledge its obligations by not remitting payments or invoices to the former executives.
According to a March 23 letter sent by Dave Anderson to the platform's attorneys, There can be no legitimate dispute that my clients are involved in these proceedings by reason of the fact each was an officer of the company, and therefore the company is obligated to advance the expenses we have submitted."
Pagar, along with the other executives, have already sent repeated letters to Twitter through their lawyers, outlining the legal expenses that have been spent for this case. However, the company violated its own bylaws as it refused to advance money to cover the said expenses.
Twitter's bylaws and agreements with executives require the company to compensate them and advance all expenses incurred with the previous cases, as they were involved for their former Corporate status in the company.
Refusing Acknowledgement
Although Pagar did not elaborate on the investigations regarding the complaint, Axios reported that SEC has been investigating Chief Tweet Elon Musk since April over his initial disclosure of the acquisition. His lawyers have also been limiting disclosures of the contacts with the agencies due to confidentially rules around communications with the persons involved.
Since he took over the company, Musk has been extending his efforts to cost-cut at Twitter by implementing mass layoffs (which affected thousands of employees) and refusing to pay leases negotiated by former executives.
Also Read: Elon Musk Questions Twitter CEO Parag Agrawal-Asks About Bots, Advertising on the Platform
Based on a report by ArsTechnica, Agrawal, and Segal were contacted by federal authorities regarding the SEC and DOJ inquiries. Since then, they provided testimony to the SEC in 2022 and continued to engage with federal authorities.
Agrawal added that after leaving the company, he still received requests to take measures to preserve certain documents, related to his prior service as an officer of Twitter. The three executives are all defendants in the class action lawsuit filed in September against the company and its top executives on behalf of the Twitter stock owners.
Related Article: Elon Musk Challenges Twitter CEO Parag Agrawal on Public Debate Regarding Bot Count
