The ultimate guide to unpaid-bill suits filed against X, Musk’s social network.
When Elon Musk bought Twitter in October 2022, a fairly ordinary tech company was transformed into a most unusual private corporation. Many strange things have happened at the Musk-owned social network, but this article will focus on just one puzzling aspect of Musk’s leadership: His apparent refusal to pay bills.
Over two dozen lawsuits alleged that Twitter—which rebranded itself as “X” in late July—refused to pay money owed to vendors who started providing services to the company before Musk bought it. In fact, suing X seems to be the most effective method of collecting on unpaid invoices. This article will provide a summary of each lawsuit and an update on each case’s status.
X agreed to settle some of the allegations, allowing some vendors to recoup at least part of what they were owed. Settlement talks are proceeding in other cases, and at least one went to arbitration. But X has taken a hard stance in fighting some unpaid-bill lawsuits, and several could head to jury trials.
Unpaid bills for work that has already been completed isn’t the only problem. In some lawsuits, vendors that signed deals with the pre-Musk Twitter say they have contracts to keep providing services and that Musk won’t honor the ongoing deals. X has also been sued for unpaid rent by landlords that own buildings where it has headquarters and other offices.
The unpaid-bill lawsuits began just weeks after Musk bought Twitter and new unpaid-bill suits were filed by different plaintiffs every month from December to June. Another lawsuit filed by former employees who are seeking unpaid severance provides some insight into how Musk’s leadership team allegedly views paying bills for services and rent as optional.
“Led by Musk and the cadres of sycophants who were internally referred to as the ‘transition team,’ Twitter’s new leadership deliberately, specifically, and repeatedly announced their intentions to breach contracts, violate laws, and otherwise ignore their legal obligations,” claimed the lawsuit filed in May 2023 by six former employees.
“Elon doesn’t pay rent,” one member of Musk’s transition team allegedly told Tracy Hawkins, one of the plaintiffs in the severance case. Another member of the transition team allegedly told ex-employee and plaintiff Joseph Killian that “Elon told me he would only pay rent over his dead body.”
X did not respond to a request for comment.
Musk: “Let them sue”
We’re using the names “X” and “Twitter” somewhat interchangeably in this article. While Musk wants everyone to call it X, the lawsuits were filed before the name change, and this article describes various events that happened either before Musk bought Twitter or before Musk changed the company name.
When asked if Musk is betting that fighting lawsuits will be cheaper than paying bills, attorney Shannon Liss-Riordan told Ars that “it’s not really clear what Musk is thinking. He seems to think he’s above the law and he can just do whatever he wants. He probably thought that not many people would actually challenge him on what he’s doing.”
Liss-Riordan isn’t involved in the severance lawsuit noted above but has several pending cases against X. She is representing six companies—so far—in a class-action lawsuit alleging that it refused to pay bills. The class-action complaint in US District Court for the Northern District of California points to a Business Insider report that said, “in response to concerns about not paying vendors who provided services to or performed work for Twitter, Musk told Twitter employees, repeatedly, to ‘let them sue.'”
A Financial Times article had a similar anecdote. “Elon would always say, ‘Let them sue,’ it was a constant refrain… It’s all very short-term thinking,” a former senior staffer reportedly said.
Many companies, both large and small, have done just that. But Liss-Riordan says some smaller companies can’t afford to file individual cases. Because “not all creditors are going to have the means or the wherewithal to file their own case, we filed it as a class action to cover all of these vendors who haven’t had their bills paid,” Liss-Riordan said.
When we talked to Liss-Riordan in late June, the class action included just four companies. She told us that additional vendors had reached out to her, and two more firms later joined as plaintiffs in the lawsuit.