Elon Musk has lost a court bid to dismiss a lawsuit filed by former Twitter CEO Parag Agrawal and other top executives seeking severance pay following Musk’s acquisition of Twitter in October 2022. U.S. District Judge Maxine Chesney ruled on Friday that the claims can move forward, allowing the executives to pursue severance benefits reportedly worth a year’s salary plus unvested stock awards valued at the acquisition price.
The ex-Twitter executives allege that Musk fired them strategically to avoid paying severance, an accusation partially based on a quote from Musk in Walter Isaacson’s biography. In the biography, Musk reportedly suggested a “$200 million differential” in severance obligations depending on the timing of the deal’s closure.
Since acquiring Twitter for $44 billion and rebranding it as X Corp, Musk has faced numerous severance-related lawsuits, including claims from thousands of laid-off employees. Although Musk successfully defended a $500 million severance suit in July, an arbitration in September awarded unpaid severance to a former employee, setting a potential precedent for other cases.
Amid ongoing layoffs and legal battles over severance, Fidelity’s recent valuation of X Corp at below $10 billion has added pressure, marking a sharp decline from Musk’s original acquisition price.
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