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Musk Lawyers Say Twitter Severance Payment To Whistleblower Has Violated The Deal

Elon Musk Twitter image 834943989
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Elon Musk and his lawyers reportedly found a new way to pull out of Twitter’s $44 billion deal. According to The Washington Post (via Engadget), Twitter has paid $7.75 million in severance to its former security chief Pieter “Mudge” Zatko, and Musk and his lawyers believe this could be a violation of the purchase contract.

The litigation between Elon Musk and Twitter seems to have no end, and they’re making the headlines daily. In the beginning, Musk said Twitter had lied about the number of bots on the platform, and later, Pieter Zatko partially confirmed these claims. However, Twitter lawyers have recently said the World War 3 threat made Musk terminate the deal. While Musk and his lawyers already confirmed they want to use Zatko’s claims against Twitter, they’re now considering Twitter’s $7.75 million severance payment to him as a way to escape the $44 billion deal.

Elon Musk’s lawyers have sent a letter to Twitter, informing the company that paying this amount of money to Zatko in June was done without Musk’s consent, and the company has violated the buyout agreement.

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Musk’s lawyers want to use Zatko’s severance payment to pull out of Twitter’s deal

The letter is uploaded on the SEC website, and Musk’s lawyers cite Section 6.1(e) of the merger agreement. The section says Twitter should not “grant or provide any severance or termination payments or benefits to any Company Service Provider other than the payment of severance amounts or benefits in the ordinary course of business consistent with past practice and subject to the execution and non-revocation of a release of claims in favor of the Company and its Subsidiaries.”

The payment to Zatko has come under lawyers’ attention after Twitter cited it in its court filing on September 3. Musk’s lawyers say Twitter should have obtained Elon Musk’s approval before giving away this money or informing him about this transaction. Of course, Twitter has responded to the allegations, saying “As was the case with both your July 8, 2022 and August 29, 2022, purported notices of termination, the purported termination set forth in your September 9, 2022 letter is invalid and wrongful under the Agreement… Twitter has breached none of its representations or obligations under the Agreement.”

Elon Musk and Twitter already agreed to appear in court on October 17. The court ruling could put an end to these arguments.

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