Elon Musk faced a major legal hurdle when a US judge ruled that lawsuits brought by former Twitter Inc. executives regarding compensation rights can proceed.

The court’s decision late Friday allows former CEO Parag Agrawal, along with top executives including Vijaya Gadde, Ned Segal and Sean Edgett, to seek compensation allegedly withheld during Musk’s 2022 acquisition of Twitter.

This case centers on allegations that Musk fired these high-ranking officials when his $44 billion acquisition was finalized, preempting his ability to resign and formally seek compensation.

The lawsuit, filed by Agrawal and his fellow former executives in March, references a statement attributed to Musk in Walter Isaacson’s recent biography.

According to the bio, Musk is quoted as noting a “200 million cookie jar spread between closing tonight and closing tomorrow morning,” suggesting urgency in his actions as he moved closer to completing the Twitter acquisition. .

The court ruling issued Friday by U.S. District Judge Maxine Chesney dismissed arguments by Musk’s legal team to dismiss Agrawal’s claims.

Agrawal and his colleagues are seeking severance pay equal to one year’s salary plus the value of the unvested shares calculated at the acquisition price.

Notably, Musk’s legal battles over compensation are not limited to these executives; They are part of a broader pattern of claims by thousands of former Twitter employees.

Backstory

Since taking control of Twitter in October 2022, Musk has been embroiled in numerous disputes over severance pay and other financial obligations, coinciding with a mass layoff of Twitter staff that led to Twitter’s name change to X Corp.

• In September, it was reported that a former employee was awarded unpaid damages in a closed-door arbitration session, a ruling that could potentially influence similar cases pending against X Corp.

• In a previous case in July, Musk’s legal team successfully defended against allegations that about 6,000 former Twitter employees were owed $500 million in severance pay under the Retirement Income Security Act. of US Employees

• The lawsuit led by Agrawal represents one of three active lawsuits filed against Musk by former Twitter executives. Among them is a claim from Nicholas Caldwell, former general manager of Twitter’s Core Technology, seeking $20 million in severance pay.

• The court’s denial of Musk’s request to dismiss Caldwell’s complaint underscores the judiciary’s openness to further review compensation issues arising from Musk’s acquisition.

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