Elon Musk’s legal tug of war with the law firm Wachtell Lipton Rosen & Katz has been advanced to arbitration over a disputed $90 million legal invoice submitted to Musk’s X Corp. As reported on Bloomberg Law, Wachtell’s request to initiate arbitral proceedings was granted by Judge Richard Ulmer Jr. of the San Francisco Superior Court.
The matter revolves around a “success fee” issued by Wachtell following Twitter Inc.’s bid to compel Musk to purchase the company, a move which culminated in the successful acquisition of Twitter for $44 billion. The lawyers at Wachtell and Twitter, rebranded as X Corp. by Musk, had reached a prior agreement to settle such matters via arbitration, Judge Ulmer indicated.
In his recent decision, Judge Ulmer underscored that “the parties clearly and unmistakably” delegated the subject at issue to arbitration. This ruling arrives after a preliminary decision favoring Wachtell was announced by Ulmer. Wachtell is being represented by Jordan Eth and Ragesh Tangri of Morrison & Foerster, whereas X Corp.’s representation comes from Reid Collins & Tsai.
X Corp. initiated a suit against Wachtell in July, taking issue with the $90 million fee paid to the firm in the wake of Twitter’s successful sale to Musk. The company argued that the fee constituted “unjust enrichment.” X Corp.’s position is that they had consented to pay the legal team at Wachtell on an hourly basis, not through a lump sum conditional fee.
The dispute, now headed for an arbitral forum, is referenced as X Corp. vs. Wachtell, Lipton, Rosen & Katz, case no. CGC-23-607461, set in the California Superior Court.