Ajit Karn
Innisfree M&A Incorporated, an advisory firm based in the United States, filed a lawsuit against Twitter on Friday in the New York State Supreme Court. The firm is seeking approximately $1.9 million for what it claims are unpaid bills after advising the social media company on its acquisition by Elon Musk the previous year.
According to the lawsuit, Twitter is still in default of its duties to Innisfree under the Agreement in the amount of not less than $1,902,788.03 as of December 23, 2022.
Requests for comments sent to Twitter and an attorney for Innisfree were not immediately met with a response.
Elon Musk completed the $44 billion acquisition that was disclosed in April of that year and made Twitter private in the month of October.
The Crown Estate in Britain is an independent commercial firm that maintains the property portfolio belonging to the monarchy. Earlier this month, the Crown Estate announced that it has initiated court action against Twitter for alleged unpaid rent on Twitter’s London headquarters.
Following Elon Musk’s takeover of Twitter, major advertisers significantly reduced their spending on the social media site during the month of December, according to statistics provided by an advertising research agency.
According to a report that was published by Reuters a month ago, the financial institutions that provided $13 billion in financing to the Tesla chief executive last year for his acquisition of Twitter abandoned plans to sell the debt to investors because of the uncertainty surrounding the social media company’s profits and losses.
According to a report from Reuters that was published in the previous month, Twitter paid its first interest payment on a loan that banks gave to help finance Musk’s purchase of the social media business last year.
Twitter and a lawyer for Innisfree did not immediately respond to requests for comment.
Innisfree’s lawsuit is the latest sign that Twitter has stopped paying some of its vendors, advisers and other service providers since Mr. Musk took over the company. Twitter took on a large amount of debt for the deal, which it must repay along with interest payments, even as it has also grappled with sliding sales. So to make the company’s finances work, Mr. Musk has slashed costs.
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Last month, the company that owns Twitter’s San Francisco headquarters accused Twitter of refusing to make more than $3 million in rent payments. Twitter also faces legal proceedings in London over a failure to pay rent.
