Renowned law firm Wachtell, Lipton, Rosen & Katz has sought assistance from Morrison & Foerster, a firm with prior ties to Elon Musk’s Tesla, to counter Musk’s lawsuit challenging $90 million in legal fees. These fees were garnered by Wachtell for its role in compelling Musk to finalize his acquisition of Twitter.
The engagement of Morrison & Foerster came to light as two of their partners, Jordan Eth and Ragesh Tangri, were identified as legal representatives for Wachtell in court documents filed last week in San Francisco Superior Court. Musk’s legal team had previously filed a lawsuit against Wachtell to reclaim a significant portion of the $90 million fee that the firm had received from Twitter, now rebranded as X, for successfully thwarting Musk’s attempt to back out of his $44 billion takeover of the social media giant.
In response to queries, neither Eth, Tangri, nor spokespeople from their respective firms offered immediate comments. Similarly, Wachtell’s spokesperson refrained from commenting, previously dismissing Musk’s lawsuit as lacking merit.
Musk’s lawsuit alleges that Wachtell took advantage of Twitter’s situation by accepting substantial “success” fees from departing Twitter executives just before the finalization of the $44 billion acquisition on October 27, 2022. These executives were appreciative that the deal was coming to fruition, and Musk contends that the fees were inappropriately large.
This legal showdown could potentially provide an uncommon glimpse into the inner workings of a premier law firm specializing in billion-dollar mergers and acquisitions. Typically, law firms safeguard their internal communications, billing records, and business development strategies zealously.
The lawsuit filed by Musk has even disclosed confidential billing rates for over 60 Wachtell timekeepers in 2022. One attorney billed Twitter over $2,000 per hour for their involvement in the Delaware buyout litigation.
Elon Musk, one of the world’s wealthiest individuals, criticized the $90 million fee as “unconscionable,” arguing that Wachtell’s charges were less than one-third of that amount for its limited engagement in the Delaware lawsuit.
Morrison & Foerster, a prominent legal entity founded in San Francisco, has previously represented Tesla, a company owned by Musk, in at least two lawsuits as confirmed by state and federal court records. Notably, Tesla agreed to pay $1.5 million in 2021 to resolve claims brought forth by owners of 1,743 Model S sedans in one of the cases. Additionally, the firm represented Tesla in a protracted securities lawsuit brought by 47 former employees in San Mateo, California. This case culminated in victory for the electric car manufacturer in December.
Jordan Eth, a key figure at Morrison & Foerster, leads the firm’s securities litigation, enforcement, and white-collar defense group. He has also represented major players like Oracle, Softbank, and Yahoo. Ragesh Tangri, another partner from Morrison & Foerster, joined the firm in January through the integration of his litigation firm Durie Tangri. His previous clients include notable entities such as Activision Blizzard, Google (Alphabet Inc.), and Netflix.
As the legal battle between Wachtell and Musk unfolds, industry observers keenly anticipate the proceedings to shed light on intricate legal strategies and financial negotiations often concealed within the realm of high-profile mergers and acquisitions.
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