Twitter is suing a law firm for more than $90 million in the Elon Musk deal

Twitter’s parent company sued a major corporate law firm on Friday for what it said were unfair payments related to Elon Musk’s $44 billion acquisition of the social media company last year.

The $90 million payment Twitter made to Wachtell, Lipton, Rosen & Katz, a leading merger and acquisition firm, amounted to “unlawful enrichment” and must be repaid, according to a filing. lawsuit, which was filed by its parent company, X Corp. , in San Francisco Superior Court.

The lawsuit said Washtel Lipton took “money from the company’s cash register while handing over the keys” to Mr. Musk, who owns X Corp.

Former Twitter management hired Wachtell Lipton after Mr. Musk tried to terminate his takeover agreement last year. It didn’t work, and the purchase closed in October.

A Twitter spokesperson, Ashtel Lipton, did not respond to requests for comment.

Twitter disputed other charges related to Mr. Musk’s purchase of the company. A consulting firm, Innisfree M&A, sued Twitter for $1.9 million in February over what it said were unpaid bills. Joel Frank, a public relations firm, File a lawsuit against Twitter in May, arguing that approximately $830,498 was not paid for services rendered in the transaction.

Wachtell Lipton is one of Wall Street’s best-known law firms, and has advised on high-profile deals including Mr. Musk’s failed bid to take over Tesla, his electric car company, in 2018. The firm charges high fees, cementing its standing among law firms. with highest earnings for each partner.

The company has been sued before. In 2018, activist investor Carl Icahn sued Wachtel-Lipton over his work in his hostile 2012 bid to acquire CVR Energy. The lawsuit was dismissed.

According to documents filed in Friday’s lawsuit, Twitter’s board and executives agreed to pay $90 million because Wachtell Lipton and one of her attorneys, William Savitt, succeeded in binding Mr. Musk in his agreement to buy the company.

By agreeing to the payment, the lawsuit said, the former executives and Twitter’s board breached their fiduciary duty. The suit said Twitter’s board of directors rushed to close the deal with Mr. Musk and did not act “prudently” or “on an informed basis.”

The suit said Washtel-Lipton sent the bulk of the $90 million fee just 10 minutes before the deal closed in October. Within minutes of Wachtel Lipton receiving that transfer, Mr. Musk fired some senior Twitter executives, including the chief legal officer and general counsel, according to the lawsuit.

Yuen Lu Contribute to the preparation of reports.