Elon Musk’s Twitter Inc (NYSE:TWTR) is being sued by former chief executive Parag Agrawal over its alleged failure to reimburse around US$1mln in personal legal expenses.
Agrawal, former general counsel Vijaya Gadde and finance chief Ned Segal claim Twitter should pay their personal legal expenses racked up after the social media company was probed by the US Department of Justice (DoJ) while they were working at the group.
Despite companies often refunding past and present employees’ legal costs, Twitter has not offered to cover the expenses, according to documents filed in Delaware chancery court.
Twitter has “refused to acknowledge its obligations and to remit payment of any invoices”, the trio said, after they faced “significant expenses” while in their former positions.
The three were laid off when Musk bought Twitter for US$44bn in October 2022, but had forked out on legal fees after being approached by the DoJ “regarding certain investigations related to the company”.
The grounds for the investigation and whether it is ongoing remain unclear, but are part of a string of probes Agrawal claims he is owed for.
Agrawal and Segal also faced legal expenses from a US Securities and Exchange Commission (SEC) inquiry, which is investigating if Musk failed to make timely disclosures when he bought a 9.2% stake in Twitter early last year.
Twitter is already facing financial woes after advertisers have fled the company, causing a dent in its revenue, prompting Musk to carry out a series of mass layoffs which have cut its workforce from around 8,000 to 2,000 in the past six months.