4 ms·

Musk Shakes Up Twitter’s Legal Team as He Looks to Cut More Costs

45 points by nickthegreek 4y ago

nickthegreek 4y ago
“ Twitter has stopped paying rent on offices and is considering not paying severance packages to former employees, among other measures.” Can anyone speak to the legality of not paying those severance packages?
- 082349872349872 4y ago
  My question is: do the people who obviously could speak to it (the legal team) have any client control at the moment?
- someNameIG 4y ago
  Looking at the article I don't think they are legal, they seem to be betting not all of the ex employees will take it to court. So they are probably expecting that less payout + legal costs < than paying all the severances.' Or it's just a delaying tactic as Twitter just doesn't have the money to pay it now, so later is better, even if it costs more.
  - fooey 4y ago
    Paying out 90 days severance for the majority of your workforce is a big stack of cash that has to come from somewhere It's not like Twitter has any cash reserves after it was just saddled with a few billion dollars of debt, and I doubt there are many banks rushing to give Twitter even short term loans
    - kccoder 4y ago
      Something tells me one of the richest men on the planet has access to sufficient funds to meet his obligations. If he doesn't, then who does? Yes, it might cost him more than he'd like, but in a civilized society, people should do what they say, and honor contracts they pen or inherit, otherwise they're just cheats and con-men.
      - TheAlchemist 4y ago
        He's not the richest men on the planet anymore. Besides, most of his fortune will evaporate soon - he probably knows it very well, given his stock sales of the past months. It's a house of cards, where leverage, free money, meme investing but also probably fraud in many ways, pumped Tesla share prices to Tulip Mania levels. You are absolutely right about honoring contracts - what does this whole Twitter buying saga tells us about his willingness to honor contracts when they are against his interests ?
  - crazygringo 4y ago
    Since it covers thousands of ex-employees, wouldn't it probably turn into a class action suit? In which case it hardly seems they'd get away with less payout in the end. I can't help but wonder if the law in that case would allow for any kind of punitive damages as well.
    - anigbrowl 4y ago
      Seems like a good way to attract the interest of regulators, since deliberate non-payment of liabilities is edging across the line into fraud.
- Dopameaner 4y ago
  perhaps, pay cheaper in the legal battle, expect the legal case to drag out, and expect by then twitter to be bankrupt or make profit.
- ajm017 4y ago
  Severance packages are pretty much voluntary in the US.
  - jacquesm 4y ago
    Not after you've agreed to pay them out in writing.
    - anonymousab 4y ago
      They're still effectively voluntary if you can draw it out in court long enough to bankrupt your former employees or convince them to take a minimal settlement.
      - jacquesm 4y ago
        Class action suits are a thing.
      - dekhn 4y ago
        That may be true, but such a trial would have an interesting effect on Twitter's ability to acquire and retain skilled workers in the future. Not that Elon seems to care.
- bell-cot 4y ago
  Quip: We're talking about a belligerent billionaire, who seems to have Emotional Maturity as his dump stat. "Legality" ain't on his priority list.
mhoad 4y ago
If this is the type and size of bills they aren’t paying it seems fairly clear that they are pretty solidly on the path towards bankruptcy
- anigbrowl 4y ago
  That and this: Mr. Musk also continues to cut staff and leaders, including Nelson Abramson, Twitter’s global head of infrastructure, and Alan Rosa, the global information technology head and vice president of information security, according to four people familiar with the moves. He wrote another tweet today about how social media threatens to collapse civilization before it can be established on Mars, to the consternation and confusion of even his fans. Maybe he's just trying to crash Twitter as opposed to restructure it financially.
  - jacquesm 4y ago
    > He wrote another tweet today about how social media threatens to collapse civilization before it can be established on Mars, to the consternation and confusion of even his fans. And hopefully his shrink. > Maybe he's just trying to crash Twitter as opposed to restructure it financially. That would explain at least some of his actions. It would allow him to chalk this one up to experience and move on. The path he's on right now will ultimately lead to the destruction of his personal brand (if we aren't there yet), Twitter, possibly Tesla and it has a non-zero chance of even affecting SpaceX due to national security concerns. No way they are going to trust a company like that with an unhinged leader privy to all of their secret stuff. Which makes me wonder to what degree there is already headscratching going on there and with the respective authorities as to whether or not they have a security situation on their hands.
    - anigbrowl 4y ago
      You might find this of interest: https://twitter.com/capitolhunters/status/1593307541932474368 https://twitter.com/capitolhunters/status/159330754193247436... It's highly opinionated by seems well sourced.
noelsusman 4y ago
>To cut costs, Twitter has not paid rent for its San Francisco headquarters or any of its global offices for weeks... Twitter’s leaders have also discussed the consequences of denying severance payments to thousands of people who have been laid off since the takeover Cut costs by just not paying money you owe to people. Truly a genius.
- 082349872349872 4y ago
  I wonder how often employers get garnished?
  - jacquesm 4y ago
    That's called bankruptcy. And it happens with great regularity. Note that even viable businesses can go bankrupt, all you have to do is mess up the payment on enough bills that your creditors have a credible case that you are in default and no longer willing or able to fulfill your obligations.
rurp 4y ago
Matt Levine is on point as usual: > Imagine being the lawyer hired to help steal one month’s salary from a laid-off kitchen staff member to give to the second-richest person in the world

45 points by nickthegreek 4y ago

“ Twitter has stopped paying rent on offices and is considering not paying severance packages to former employees, among other measures.” Can anyone speak to the legality of not paying those severance packages?

082349872349872 4y ago
My question is: do the people who obviously could speak to it (the legal team) have any client control at the moment?
someNameIG 4y ago
Looking at the article I don't think they are legal, they seem to be betting not all of the ex employees will take it to court. So they are probably expecting that less payout + legal costs < than paying all the severances.' Or it's just a delaying tactic as Twitter just doesn't have the money to pay it now, so later is better, even if it costs more.
- fooey 4y ago
  Paying out 90 days severance for the majority of your workforce is a big stack of cash that has to come from somewhere It's not like Twitter has any cash reserves after it was just saddled with a few billion dollars of debt, and I doubt there are many banks rushing to give Twitter even short term loans
  - kccoder 4y ago
    Something tells me one of the richest men on the planet has access to sufficient funds to meet his obligations. If he doesn't, then who does? Yes, it might cost him more than he'd like, but in a civilized society, people should do what they say, and honor contracts they pen or inherit, otherwise they're just cheats and con-men.
    - TheAlchemist 4y ago
      He's not the richest men on the planet anymore. Besides, most of his fortune will evaporate soon - he probably knows it very well, given his stock sales of the past months. It's a house of cards, where leverage, free money, meme investing but also probably fraud in many ways, pumped Tesla share prices to Tulip Mania levels. You are absolutely right about honoring contracts - what does this whole Twitter buying saga tells us about his willingness to honor contracts when they are against his interests ?
- crazygringo 4y ago
  Since it covers thousands of ex-employees, wouldn't it probably turn into a class action suit? In which case it hardly seems they'd get away with less payout in the end. I can't help but wonder if the law in that case would allow for any kind of punitive damages as well.
  - anigbrowl 4y ago
    Seems like a good way to attract the interest of regulators, since deliberate non-payment of liabilities is edging across the line into fraud.
Dopameaner 4y ago
perhaps, pay cheaper in the legal battle, expect the legal case to drag out, and expect by then twitter to be bankrupt or make profit.
ajm017 4y ago
Severance packages are pretty much voluntary in the US.
- jacquesm 4y ago
  Not after you've agreed to pay them out in writing.
  - anonymousab 4y ago
    They're still effectively voluntary if you can draw it out in court long enough to bankrupt your former employees or convince them to take a minimal settlement.
    - jacquesm 4y ago
      Class action suits are a thing.
    - dekhn 4y ago
      That may be true, but such a trial would have an interesting effect on Twitter's ability to acquire and retain skilled workers in the future. Not that Elon seems to care.
bell-cot 4y ago
Quip: We're talking about a belligerent billionaire, who seems to have Emotional Maturity as his dump stat. "Legality" ain't on his priority list.

mhoad 4y ago

If this is the type and size of bills they aren’t paying it seems fairly clear that they are pretty solidly on the path towards bankruptcy

anigbrowl 4y ago
That and this: Mr. Musk also continues to cut staff and leaders, including Nelson Abramson, Twitter’s global head of infrastructure, and Alan Rosa, the global information technology head and vice president of information security, according to four people familiar with the moves. He wrote another tweet today about how social media threatens to collapse civilization before it can be established on Mars, to the consternation and confusion of even his fans. Maybe he's just trying to crash Twitter as opposed to restructure it financially.
- jacquesm 4y ago
  > He wrote another tweet today about how social media threatens to collapse civilization before it can be established on Mars, to the consternation and confusion of even his fans. And hopefully his shrink. > Maybe he's just trying to crash Twitter as opposed to restructure it financially. That would explain at least some of his actions. It would allow him to chalk this one up to experience and move on. The path he's on right now will ultimately lead to the destruction of his personal brand (if we aren't there yet), Twitter, possibly Tesla and it has a non-zero chance of even affecting SpaceX due to national security concerns. No way they are going to trust a company like that with an unhinged leader privy to all of their secret stuff. Which makes me wonder to what degree there is already headscratching going on there and with the respective authorities as to whether or not they have a security situation on their hands.
  - anigbrowl 4y ago
    You might find this of interest: https://twitter.com/capitolhunters/status/1593307541932474368 https://twitter.com/capitolhunters/status/159330754193247436... It's highly opinionated by seems well sourced.

noelsusman 4y ago

>To cut costs, Twitter has not paid rent for its San Francisco headquarters or any of its global offices for weeks... Twitter’s leaders have also discussed the consequences of denying severance payments to thousands of people who have been laid off since the takeover Cut costs by just not paying money you owe to people. Truly a genius.

082349872349872 4y ago
I wonder how often employers get garnished?
- jacquesm 4y ago
  That's called bankruptcy. And it happens with great regularity. Note that even viable businesses can go bankrupt, all you have to do is mess up the payment on enough bills that your creditors have a credible case that you are in default and no longer willing or able to fulfill your obligations.

rurp 4y ago

Matt Levine is on point as usual: > Imagine being the lawyer hired to help steal one month’s salary from a laid-off kitchen staff member to give to the second-richest person in the world