Topline
An Australian-based infrastructure company has sued Twitter after the company allegedly failed to pay its bills for more than $600,000 in office work around the world, marking at least the sixth lawsuit the social media giant has faced over failing to make payments on its offices since billionaire Elon Musk took over the company in October.
A sign outside of the Twitter office building in San Francisco on July 9, 2019.
Key Facts
Facilitate Corporation sued Twitter in San Francisco federal court on June 29 after the company allegedly never paid for approximately $665,000 ($1 million in Australian dollars) worth of work on infrastructure for Twitter’s offices in Australia, London, Dublin and Singapore.
Twitter did not give any reason for not making the payment and simply “ignore[d]” Facilitate’s outstanding invoices, the lawsuit notes, which totaled $546,596.55 in Singapore dollars (approximately $404,178 in U.S. dollars) for work in Singapore; £203,115.62 (approximately $257,329 USD) for work in London and Dublin and $61,318.40 in Australian dollars (approximately $40,769 USD) for work in Australia.
The lawsuit attributes Twitter’s failure to pay to the “instant financial crisis” at the company after Musk took control of Twitter, alleging his content moderation decisions “alienate[d]” advertisers and led Twitter to stop paying vendors.
Facilitate’s litigation is the latest in a string of lawsuits filed over Twitter’s failure to pay for its offices, with other lawsuits being brought in recent months over Twitter not paying rent on its offices in Oakland, Boston, Seattle and London, along with two separate lawsuits over its San Francisco properties.
At least some of those lawsuits have been resolved: the Oakland lawsuit was dropped in June, and Britain’s Crown Estate withdrew its lawsuit after Twitter paid rent on its London office, a spokesperson confirmed to Bloomberg.
Forbes was unable to approach Twitter for comment, as the company got rid of its media relations department as part of widespread layoffs, and no lawyers have yet been named in court filings to represent the company in the litigation.
Crucial Quote
Twitter alienating its advertisers “amounted to requiring nearly everyone to whom it owes money to sue,” the lawsuit, filed in Northern California, states.
Key Background
Musk’s reign at Twitter since taking over in October has been marked by a series of financial issues. The Tesla chief’s deal to buy Twitter saddled the company with $12.5 billion in debt, and data from Sensor Tower reported by Bloomberg in March found spending by Twitter’s top 10 advertisers had decreased by 89% since right before Musk took power, as his controversial decisions on how to run the company have spooked advertisers. Twitter reported a 40% decline in revenue in December, the Wall Street Journal reported. The New York Times reported in December that Twitter had stopped paying rent at its offices as a cost-saving measure amid the turmoil as Musk took power, along with other outstanding payments the company owed. According to Bloomberg, at least 10 vendors sued Twitter between December and May over the company’s failure to pay its debts, totaling $10 million in outstanding payments for such charges as private flights, public relations services, marketing, software and legal consulting.
News Peg
News of Facilitate’s lawsuit, first reported Sunday by Australian outlet NCA Newswire, broke as Twitter faces a new controversy over Musk’s decision to impose “temporary” limits on how many tweets people can read each day. The limits—which started at 600 posts per day for non-verified users, but have since been increased to 1,000 per day—have drawn widespread criticism from Twitter users, leading Musk to joke about being “rate limited due to reading all the posts about rate limits.” Musk has said reading limits were needed to “address extreme levels of data scraping and system manipulation,” though the Guardian notes there’s been speculation it was because Twitter could not pay for services to keep the site up and running as normal.
Forbes Valuation
Forbes estimates Musk’s net worth at $237.7 billion as of Monday, making him the richest person in the world.
Further Reading
Twitter’s Unpaid Bills Threaten to Be an Even Bigger Problem for Elon Musk (Bloomberg)
Twitter sued after alleged failure to pay to dismantle Sydney office (NCA Newswire)
Elon Musk Announces ‘Temporary’ Reading Limit On Twitter Amid Outage (Forbes)
