Twitter is facing an onslaught of lawsuits filed by landlords, consultants, and vendors, all of whom allege unpaid bills.
Since billionaire Elon Musk’s $44 billion buyout, the social media business has been seeking to reduce expenses and reach a break-even threshold.
According to nine lawsuits viewed by the Wall Street Journal, the total amount of complaints plus interest exceeds $14 million.
These include a $7,000 charge issued by Twitter’s marketing department for a “swag gift box for Elon” shortly before the $44 billion acquisition was finalized on October 27; the vendor who provided the box has yet to be paid.
The company’s court filings disclosed the gift box featured, among other things, a Japanese whiskey bottle with a sandblasted emblem, an extra-large bomber jacket, and more than $250 worth of socks.
Musk has been squabbling over practically every penny since he purchased Twitter in October of last year, with many of the other debts already outstanding.
As soon as he entered the San Francisco offices, he embraced a more conservative approach to company expenditures, even auctioning off ‘woke’ office equipment, such as a big Twitter bird statue and other thousand-dollar things starting at $25.
Among the fancy items from the San Francisco office are a $20,000 espresso machine, a $10,000 vegetable dryer, and a $17,000 braising pan. In addition to chairs, tables, and kegs, a ‘@’-shaped planter was also available.
It was reported in December that Musk had stopped paying rent on Twitter’s Seattle office and was planning to close one of the company’s New York headquarters.
Since then, the San Francisco headquarters has been reduced from four to two floors, with odiferous offices that are no longer cleaned as a result of the dismissal of striking janitors seeking higher pay.
According to current and past employees, the office was left reeking of leftover takeout and body odor.
Musk has managed firms on the verge of bankruptcy in the past, including Tesla, which came extremely close to running out of money.
Musk seemed to take a hands-on approach to addressing the company’s financial issues, placing pressure on suppliers and vendors to save money when it was crucial.
According to Van Conway, a restructuring expert who has aided struggling companies for over four decades, Elon Musk’s actions resemble a bankruptcy. He is reducing expenses with a machete.
Musk has implemented a lot of big changes at Twitter, which has a history of losing money, since assuming control in October.
Musk reduced employees and expenses in reaction to an advertiser retreat and deal-related debt charges.
He publicly questioned the company’s expenditures, particularly the annual expenditure of $13 million on employee dinners.
Musk has lately said that the company is making progress toward breaking even, despite his early prediction that Twitter could face bankruptcy due to its daily losses of over $4 million.
Twitter is currently private and no longer makes its financial information public.
The corporation faces at least three office space-related lawsuits, including charges that it failed to pay roughly $6.8 million in December and January rent at its San Francisco headquarters.
In 2012, the company owed $239 million for office space and data center infrastructure.
In a related complaint, a marketing company asserted that Twitter owes nearly $400,000 for items bearing the company’s logo.
Musk’s other company, Tesla, has also experienced financial difficulties, particularly during Model 3 production.
Tesla increased payment terms from 60 to 90 days and halted some payments, prompting some suppliers to file mechanic’s liens in an attempt to recover unpaid money.
Musk stated at the time, “We’re not in arrears because we can’t pay them.” It’s because we’re disputing if the parts are correct.
During the onset of the Covid-19 outbreak, Tesla also contacted landlords requesting rent reductions.
Some of the unresolved claims pertained to the company’s efforts to finalize the transaction with Musk.
Private Jet Services Group LLC filed a lawsuit in December 2022, which has since been dropped, demanding $197,725 for arranging last-minute charter flights from New Jersey to San Francisco and return for then-chief marketing officer Leslie Berland.
The head of Twitter’s worldwide strategic sourcing, Marty O’Neill, warned the air-charter business that Twitter would not be paying for the trips, stating that Twitter’s contract with Private Jet Services only authorized designated personnel to arrange aircraft.
Another Twitter employee asserted that former CEO Parag Agrawal had authorized the flights, but O’Neill refused to bend in accordance with the new management’s policies.
»Twitter allegedly have over $14M debt as the tech giant struggles to break even this year«
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