Background

In March 2024, four senior executives of Twitter—former CEO Parag Agrawal, former CFO Ned Segal, former chief legal officer Vijaya Gadde, and former general counsel Sean Edgett—filed a lawsuit in the U.S. Northern District Court of California. The lawsuit claimed that Elon Musk, after acquiring Twitter in 2022, closed the $44 billion purchase a day early, thereby preventing the executives’ stock options from vesting and depriving them of more than $128 million in severance payments.

Settlement Details

According to a recent court filing, the parties have reached an undisclosed settlement. The agreement is dependent on Musk meeting certain conditions that were not specified in the filing. Existing deadlines in the lawsuit have been postponed to give Musk time to fulfill these obligations. If the conditions are not met, the settlement could be voided and the lawsuit would resume.

Legal Context

The lawsuit also referenced a quote from Musk in Walter Isaacson’s biography, where Musk allegedly said that closing the deal early would create a “two‑hundred‑million differential in the cookie jar.” The executives contend that Musk threatened to “hunt every single one of” Twitter’s executives and directors. In addition to this case, X (the rebranded Twitter) settled “thousands” of other cases in August after former employees sued over a failure to provide the required 60‑day advance notice before mass layoffs in 2022.

Potential Outcomes

The settlement agreement includes a provision that the lawsuit will resume on October 31 if the conditions are not satisfied. This deadline provides a clear timeline for both parties to assess compliance. The resolution of this high‑profile dispute could have broader implications for executive severance arrangements and corporate governance in tech acquisitions.

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