Twitter faced a lawsuit for $1.9 million from advisory firm Innisfree, claiming unpaid bills.
In a surprising turn of events, US-based advisory firm Innisfree M&A Incorporated has filed a lawsuit against Twitter for approximately $1.9 million in the New York State Supreme Court. The lawsuit, which was filed on February 3, 2023, alleges that the unpaid bills are due to advice provided by Innisfree on Twitter's acquisition by Elon Musk in the previous year.
According to court documents, as of December 23, 2022, Twitter is in default of its obligations to Innisfree, with the amount owed being not less than $1,902,788.03. Innisfree M&A Incorporated, primarily known for its shareholder proxy solicitation services and related activities, has not publicly disclosed the specific reasons for the lawsuit.
The lawsuit comes at a time when Twitter is grappling with financial challenges. Advertising spending on the social media platform decreased by 71% in December, and top advertisers have reduced their spending after Elon Musk's takeover. The banks that provided $13 billion in financing for Musk's acquisition abandoned plans to sell the debt to investors due to uncertainty about Twitter's fortunes and losses.
Interestingly, Reuters reported last month that Twitter made its first interest payment on a loan that banks provided to help finance Musk's purchase of the company. However, details about the lawsuit and Twitter's response to Innisfree's claims remain scarce. Twitter and a lawyer for Innisfree did not respond to requests for comment at the time of the report.
In a separate development, Britain's Crown Estate has initiated court proceedings against Twitter over alleged unpaid rent on its London headquarters. As the situation unfolds, it remains to be seen how Twitter will navigate these legal challenges and restore financial stability.
The financial strife at Twitter continues as Innisfree M&A Incorporated, a prominent advisory firm, has filed a lawsuit for about $1.9 million, alleging unpaid bills from Twitter, which stem from advice provided during Twitter's acquisition by Elon Musk. This legal action coincides with Twitter's business dilemmas, such as a 71% decrease in advertising spending in December and top advertisers cutting back their spending post-Musk's takeover. Furthermore, the banks that financed Musk's acquisition have halted plans to sell the debt due to concerns about Twitter's future profits and losses.
