Ex-Twitter Execs Sue Over $1M+ In Unpaid Legal Expenses

A trio of former Twitter executives led by ex-CEO Parag Agrawal have sued the company for allegedly not reimbursing more than a million dollars in legal expenses incurred during and after their employment, as their contracts oblige.

Agrawal, along with former CFO Ned Segal and head of legal and policy Vijaya Gadde, claim in the complaint [PDF], filed in the Delaware Chancery Court and shared by the New York Times, that they've racked up the collective seven-digit figure since last year defending themselves and Twitter against four separate cases and government investigations.

Per their claims, the trio's indemnification agreements and Twitter's own corporate bylaws require full reimbursement of legal expenses related to their time at Twitter, both during and after their employment ends.

According to their lawyers, Twitter hasn't bothered to do anything but acknowledge receipt of the requests, and that only came after three certified letters sent to the company between January and March.

"Over two months after plaintiffs initial demand, outside counsel for [Twitter] responded it was in receipt of Plaintiffs various correspondence," the compliant read, adding that Twitter's "counsel did not acknowledge its obligation to advance plaintiffs expenses."

The trio included attachments and excerpts from the indemnification agreements and bylaws in the lawsuit to support their claims. In one excerpt from Twitter's bylaws, the complaint states the company's own rules say that Twitter shall indemnify "any person who was or is a party … to any threatened, pending or completed action, suit or proceeding … by reason of the fact that such person is or was a director or officer of the corporation."

The bylaws say that expenses including attorney fees, judgments, fines or amounts paid in settlement are all covered. The execs say the indemnification agreements they signed include similar language, along with the addition that Twitter has 30 days from receipt of claims to advance such expense reimbursements. 

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The indemnification agreements further state that if Twitter fails to follow through on its obligation to repay indemnified execs, said execs have the right to take the issue to court in the State of Delaware, as is now the case. If the trio manages to prove their case, Twitter will also be on the hook for legal expenses incurred during the lawsuit.

Twitter didn't respond to requests for comment on the suit with anything meaningful or constructive. (Yep, the poop emoji again.)

Owner Elon Musk has made profitability one of his core missions since taking over the company last October after buying it for $44 billion, though recent reports suggest the man himself believes it's worth less than half that amount.

Twitter is also facing a growing tide of lawsuits, including at least nine cases for unpaid bills like rent at the company's San Francisco headquarters and other locations.

Along with lawsuits alleging it hasn't been following through on financial obligations, Twitter has been facing technical scrutiny as well. A January lawsuit claims the company failed to protect user privacy when an API issue exposed the data of some 200 million Twitteratti, while EU and US regulators have both expressed concerns that staff cuts mean the platform won't be able to properly moderate its content. German authorities have also threatened Twitter with a fine that could go as high as €50 million ($54.7 million, £43.8 million) for violating hate speech laws. 

Musk said in early February that, despite his claims that Twitter was losing millions of dollars a day, the company was getting close to breaking even. That claim is looking continually more difficult to justify given the growing number of legal actions the company is facing. ®