5 ms·

Twitter refusing to pay office rent, says reports

13 points by antimora 4y ago

Finnucane 4y ago
Stiffing people you owe money to is not 'cutting costs'. That's called 'being a deadbeat.'
- mytailorisrich 4y ago
  They'll pay. This is an aggressive negotiation tactic as they are trying to renegotiate leases.
  - spoils19 4y ago
    Exactly. This makes Elon Musk smart, as no one has ever tried not paying rent in order to negotiate before. Wonder why not many people try to do that.
    - mytailorisrich 4y ago
      I know nothing about commercial real estate but I suspect this is something that does happen as I doubt they have just come up with a groundbreaking new negotiation tactic.
      - Apocryphon 4y ago
        I think (I hope) they are being sarcastic.
  - HappySweeney 4y ago
    As far as I understand, commercial real-estate leases are iron-clad contracts and not open to renegotiation until expiry. Failure to pay rent can easily result in a quick court judgement which allows the landlord to lock the doors, or via the remedy of distraint (as it's called in Ontario) enter the premises and start grabbing stuff in order to sell it off and recoup losses. Maybe things work differently in SF?
    - Finnucane 4y ago
      Since he seems to be trying to turn it into a dorm at the same time, maybe looking for a residential deal?
    - mytailorisrich 4y ago
      Well of course that's the legal, textbook position. In practice the commercial reality may be different: potential financial impact on landlord of not getting rent, costs of legal remedies, current market situation (what happens if they need to find a new tenant), etc. I'm sure Twitter/Musk have agents/lawyers who know the commercial real estate business.
      - guax 4y ago
        Yes, Elon lawyers are incredible at contract law. I could not think of one example on where they failed him on that.
- lost_tourist 4y ago
  Isn't this just part of the "Art of the Deal" ?
vba616 4y ago
>Mr. Musk’s team is now reconsidering whether it should pay [severance] or just face lawsuits from disgruntled former employees. >In other money-saving moves, Twitter has laid off its kitchen staff... `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. Imagine thinking that was an ethical thing to do. Obviously the second-richest person in the world is going to pay you more to steal money from the kitchen staff than the kitchen staff will pay you to stop him. Nevertheless!' `If Twitter’s strategy is to just not pay bills, well, it has $1.2 billion of interest bills to pay each year, and surely Musk is curious about what will happen if he doesn’t pay those...Like if the banks do manage to foreclose on Twitter, what will be left?' (Money Stuff today)
prirun 4y ago
If there's a realistic chance of Twitter going bankrupt, it seems logical to not pay vendors, rent, and severance, especially considering the time it will take any legal proceedings. Not saying it's ethical; the whole deal has been stupid from the start, and Elon's an asshole IMO. If the company files for bankruptcy, all of these debts won't matter much. Why does he care how the scraps are divided up? A: he doesn't.

13 points by antimora 4y ago

Finnucane 4y ago

Stiffing people you owe money to is not 'cutting costs'. That's called 'being a deadbeat.'

mytailorisrich 4y ago
They'll pay. This is an aggressive negotiation tactic as they are trying to renegotiate leases.
- spoils19 4y ago
  Exactly. This makes Elon Musk smart, as no one has ever tried not paying rent in order to negotiate before. Wonder why not many people try to do that.
  - mytailorisrich 4y ago
    I know nothing about commercial real estate but I suspect this is something that does happen as I doubt they have just come up with a groundbreaking new negotiation tactic.
    - Apocryphon 4y ago
      I think (I hope) they are being sarcastic.
- HappySweeney 4y ago
  As far as I understand, commercial real-estate leases are iron-clad contracts and not open to renegotiation until expiry. Failure to pay rent can easily result in a quick court judgement which allows the landlord to lock the doors, or via the remedy of distraint (as it's called in Ontario) enter the premises and start grabbing stuff in order to sell it off and recoup losses. Maybe things work differently in SF?
  - Finnucane 4y ago
    Since he seems to be trying to turn it into a dorm at the same time, maybe looking for a residential deal?
  - mytailorisrich 4y ago
    Well of course that's the legal, textbook position. In practice the commercial reality may be different: potential financial impact on landlord of not getting rent, costs of legal remedies, current market situation (what happens if they need to find a new tenant), etc. I'm sure Twitter/Musk have agents/lawyers who know the commercial real estate business.
    - guax 4y ago
      Yes, Elon lawyers are incredible at contract law. I could not think of one example on where they failed him on that.
lost_tourist 4y ago
Isn't this just part of the "Art of the Deal" ?

vba616 4y ago

>Mr. Musk’s team is now reconsidering whether it should pay [severance] or just face lawsuits from disgruntled former employees. >In other money-saving moves, Twitter has laid off its kitchen staff... `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. Imagine thinking that was an ethical thing to do. Obviously the second-richest person in the world is going to pay you more to steal money from the kitchen staff than the kitchen staff will pay you to stop him. Nevertheless!' `If Twitter’s strategy is to just not pay bills, well, it has $1.2 billion of interest bills to pay each year, and surely Musk is curious about what will happen if he doesn’t pay those...Like if the banks do manage to foreclose on Twitter, what will be left?' (Money Stuff today)

prirun 4y ago

If there's a realistic chance of Twitter going bankrupt, it seems logical to not pay vendors, rent, and severance, especially considering the time it will take any legal proceedings. Not saying it's ethical; the whole deal has been stupid from the start, and Elon's an asshole IMO. If the company files for bankruptcy, all of these debts won't matter much. Why does he care how the scraps are divided up? A: he doesn't.