On Friday, Twitter Elon Musk 7.75m Zatko declared on Twitter that he has no obligation to complete his $44 billion purchase of Tesla Inc., citing the recent disclosure that it had agreed to pay whistleblower Peiter “Mudge” Zatko and his lawyers $7.75 million as part of a severance package.
Tech isn’t your friend – but we are Sign up for The Tech Friend
Musk’s lawyers sent a letter to Twitter on Saturday in which they claimed the payment violated a provision in their sale agreement that prohibited Twitter from making any severance payment that wasn’t “in the ordinary course of business consistent with past practice.
” According to Musk’s termination letter, he learned of June’s payment only after reading it in a court filing on Saturday.
Musk’s attorneys have filed two additional notices of termination on other grounds. They said they would file a third if the Delaware Chancery Court, where Twitter Elon Musk’s 7.75m Zatko has filed to enforce the purchase contract, rules that the first two had not provided valid reasons for termination.
Twitter submitted its payout agreement with Zatko to the court ahead of this week’s hearing in which Musk successfully sought to amend his countersuit to include Zatko’s claims in a whistleblower complaint to the Securities and Exchange Commission. Among other allegations, Zatko asserted that Twitter had breached its data-protection settlement with the Federal Trade Commission.
Zatko had served as head of security at Twitter for 15 months prior to being fired in January due to disagreements over disclosures to the board.
Twitter’s settlement with Zatko included a non-disparagement clause, but his attorneys say it left him the right to file his whistleblower complaint with the SEC and Congress. On Tuesday, he will testify before a Senate committee.
Musk’s latest notice to Twitter refers to a clause in their April sales agreement that stated they would not “grant or provide any severance or termination payments or benefits to any Company Service Provider other than what would be paid out in the ordinary course of business consistent with past practice.” It further clarifies that this definition includes former employees.
Twitter appears to have abandoned its defense that such a high payout was nothing out of the ordinary.
Twitter’s communications team did not immediately respond to a request for a comment