Ex-Twitter CEO Reveals DOJ Probe in Pursuit of Legal Fees Repayment

(Bloomberg) — Twitter Inc.’s former chief executive officer revealed that the US Justice Department looked into the social-media platform as he and other executives sought to force the company to cover their legal fees related to lawsuits and government investigations.

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Parag Agrawal, who was ousted last year by new owner Elon Musk, and other former executives said in a Delaware Chancery Court lawsuit they’ve spent more than $1 million on lawyers in connection with the probes and shareholder lawsuits over their management of the firm.

Agrawal said in the complaint his lawyer was contacted by representatives of the Justice Department late in 2022 “regarding certain investigations related to the company.” He didn’t elaborate. The New York Times had reported on the lawsuit earlier.

Musk had been contacted earlier in 2022 by the US Securities Commission and the Federal Trade Commission over his initial disclosure of acquiring a major stake in Twitter. The billionaire’s lawyers sought to limit disclosures of the contacts with the government, citing confidentiality rules around communications with attorneys.

Twitter’s former managers claim in their suit that their lawyers have sent repeated letters to Twitter’s attorneys outlining the legal expenses they’ve racked up, but the company is violating its own bylaws by “refusing to advance” money to cover their expenses, according to the 20-page complaint filed Monday.

Representatives of San Francisco-based Twitter didn’t respond to an email seeking comment on the suit. Other executives demanding Twitter advance legal fees to them include Vijaya Gadde, its former top lawyer and Ned Segal, Twitter’ onetime chief financial officer

Twitter is facing several investor suits over the fallout from Musk’s purchase of the platform for $44 billion last year after his failed effort to get out of the deal.

The case is Agrawal v. Twitter Inc., No. 2023-0409, Delaware Chancery Court (Wilmington)

(Corrects that former executives incurred $1 million in fees in total in second paragraph.)

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