Elon Musk X Corp Settle $128M Lawsuit with Former Twitter Executives

Elon Musk and X Corp., the company formerly known as Twitter, have settled a $128 million lawsuit filed by former CEO Parag Agrawal and three other top executives. The executives claimed they were denied severance payments following their dismissals after Musk’s takeover of the company.

The settlement terms were not disclosed in a federal court filing on September 30, which also postponed upcoming case deadlines and a scheduled hearing in San Francisco. A lawyer representing the executives stated, “The parties have reached a settlement and the settlement requires certain conditions to be met in the near term.”

Background of the Lawsuit

This settlement follows a separate high-profile resolution earlier this year, when Musk and X Corp. settled a $500 million lawsuit brought by roughly 6,000 rank-and-file employees. That lawsuit alleged the company failed to provide severance payments to numerous workers following Musk’s acquisition of the platform in 2022.

Musk finalized his $44 billion acquisition of Twitter, now X, in 2022, after an initial attempt to back out of the deal was blocked by a Delaware judge. Immediately following the takeover, several top executives were dismissed, including:

• Parag Agrawal – former CEO

• Vijaya Gadde – former chief legal officer

• Ned Segal – former CFO

• Sean Edgett – former general counsel, now with Match Group

The lawsuit focused on disputes over executive severance and workplace policies under Musk’s leadership. Multiple legal actions have also accused X Corp. of labor and workplace violations, including failure to pay severance to laid-off employees.

Related Legal Developments

In a related case in Delaware, a federal judge recently dismissed part of a class-action lawsuit by former Twitter employees claiming wage theft. The court ruled that Musk could not be held personally liable as an “alter ego” of the company.

The California case, formally titled Agrawal v. Musk, 24-cv-01304, is being heard in the U.S. District Court for the Northern District of California. Representatives for Musk and X Corp. have not commented, and lawyers for the former executives declined to provide additional details on the settlement.

Implications

The resolution of this high-profile lawsuit highlights the ongoing legal and financial challenges facing Musk and X Corp., even years after the dramatic acquisition of one of the world’s most influential social media platforms.