Elon Musk's Twitter Faces Lawsuits Seeking Over $14 Million in Unpaid Bills.

Since Elon Musk took over, Twitter Inc. it has faced a growing number of charges that it hasn't paid its expenses as the social-media firm attempts to break even this year.

‍

In at least nine lawsuits filed in recent months, landlords, consultants, and suppliers have demanded payment totaling more than $14 million plus interest.

‍

Among those citing past-due notifications is an invoice of over $7,000 for a "swag gift package for Elon" ordered by Twitter's marketing department in the days before the $44 billion acquisition completed on October 27.

‍

The plaintiff sought dismissal in one of the nine claims, and the case closed Friday.

‍

Mr. Musk acquired the debts when he assumed leadership more than three months ago and immediately adopted a more frugal spending approach as part of his hallmark ferocity.

‍

His career before Twitter has featured navigating close brushes with financial calamity, with Tesla Inc. nearly running out of money. He has addressed earlier financial issues partially by pressing suppliers and vendors when preserving cash was vital.

‍

"What Elon Musk is doing is simulating a bankruptcy," said Van Conway, a restructuring specialist who has assisted troubled businesses for almost four decades. He is applying a machete to his expenses.

‍

Mr. Musk and Twitter did not reply to our requests for comment.

‍

Since late October, Twitter has undergone major changes as Mr. Musk has rushed to redesign the firm's product with a history of losing money and cutting costs in response to an advertising withdrawal and transaction-related debt obligations. In tweets, he has criticized expenditures, including what he claims is $13 million a year on employee dinners at the company's headquarters.

‍

Early on, Mr. Musk claimed that the firm was losing more than $4 million per day and hinted at the possibility of bankruptcy. Since then, he has stated that the firm is advancing. Mr. Musk tweeted on February 5: "Twitter still has obstacles, but is currently going toward breakeven if we stick at it."

‍

Three of the U.S. cases concern office space, including the company's headquarters in San Francisco, where the landlord claims Twitter failed to pay over $6.8 million in December and January rent.

‍

Twitter, which is now private, no longer publicly discloses its financial information. The corporation reported owing $239 million in 2023, largely for office space and data center infrastructure.

‍

In a complaint filed in January, Canary LLC, a marketing business that specializes in making the types of logo-decorated objects prevalent among Silicon Valley tech companies, alleged that Twitter owes over $400,000 for a variety of Twitter-branded swag.

‍

The company's court documents included a purchase order for over $7,000 that described a "swag gift box for Elon." The invoice for the order featured a sandblasted logo on a bottle of Japanese whiskey, an extra-large bomber jacket, and socks costing more than $250.

‍

Canary's attorney declined to comment. It was unknown if the products were intended for Mr. Musk or if he got them.

‍

In 2018, Tesla, where Mr. Musk is also the chief executive, alarmed its suppliers as it battled to increase Model 3 manufacturing. The Wall Street Journal stated that the corporation extended its payment terms to 90 days from 60 days and suspended some payments.

‍

Several respondents to a supplier survey then reported Tesla requesting a "large" price reduction on current business and retroactive rebates. Some smaller suppliers filed mechanic's liens—legal claims seeking unpaid compensation—against Tesla, alleging unpaid suppliers and services. 

‍

"We're not behind because we can't pay them," Mr. Musk said. "It is just because we're arguing whether the parts are right." The company had been working to improve its on-time payments, the Trade Algo reported.

‍

During the early, uncertain days of the Covid-19 outbreak, Tesla sought out certain landlords seeking rent reductions after early quarantine measures had stopped much of its company. As corporations struggled to preserve cash, the automaker was not the only one making such requests.

‍

Some of the alleged unpaid invoices at Twitter relate to work performed by the business to finalize the occasionally difficult purchase transaction with Mr. Musk.

‍

As the deal came together last fall, Twitter executives were racing to complete it and arranged last-minute charter flights from New Jersey to San Francisco and back for then-Chief Marketing Officer Leslie Berland, according to a lawsuit filed in December in federal court in New Hampshire by Private Jet Services Group LLC seeking $197,725.

‍

According to court documents, Twitter's head of global strategic sourcing, Marty O'Neill, notified the air-charter business via email that Twitter would not be paying for the trips. According to the contract between Twitter and Private Jet Services, only designated personnel were permitted to book flights through the charter. He didn't reply to a request for comment.

‍

Another Twitter employee commented on the email exchange that former CEO Parag Agrawal had approved the flights. "It was a critical requirement the week the transaction closed, and Leslie was the principal person from Twitter communicating directly with Elon," the insider wrote.

‍

Mr. O'Neill said, "The next administration will not bend."

‍

On Friday, Private Jet Services sought to voluntarily dismiss the complaint, and the action was dismissed. Neither party replied to a request for comment.

‍