Judicial Notice (10.29.22): Chief Twit
Twitter's top attorneys get fired, Kanye West gets ditched, and other legal news from the week that was.
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Although I’m now back home in New Jersey, I composed most of this week’s Judicial Notice in the Terminal A lounge of the Sacramento Airport, waiting for my redeye flight back to the East Coast. Thanks to the Asian/Pacific Bar Association of Sacramento (“ABAS”) for hosting me as the keynote speaker of their 2022 gala, their first since the start of the pandemic, and congrats to ABAS on its 40th anniversary.
And thanks to Caleb Vesey, corporate partner at Willkie Farr & Gallagher, who kindly joined me and Zach Sandberg of Lateral Link for the latest episode of Movers, Shakers, and Rainmakers. We discussed Willkie’s California expansion and Vesey’s advice for associates trying to make partner, among other subjects.
Now, on to the news.
Lawyers of the Week: Vijaya Gadde, Sean Edgett, and Twitter’s outside counsel.
The biggest news in an otherwise slow week was the closing of Elon Musk’s $44 billion purchase of Twitter. And Twitter shareholders, billions of dollars better off than they would have been had the deal fallen through, have the company’s lawyers to thank. After market conditions changed, Musk tried to wriggle out of the deal—and he would have gotten away with it too, if it weren’t for those meddling lawyers.
Congratulations to Twitter’s chief legal officer Vijaya Gadde, its general counsel Sean Edgett, and its outside counsel at Wachtell Lipton, Wilson Sonsini, and Potter Anderson. Musk agreed to proceed with the Twitter deal only as he was about to be deposed and the case was about to go to trial, so this is a situation where lawyers made a difference—a multibillion-dollar difference.
How did it all go down, and what role did the lawyers play? The Financial Times has a very interesting behind-the-scenes look at the deal and ensuing legal battle, which contains these tidbits: (1) junior associates at Wachtell acted as “meme-splainers” to their senior colleagues, “deciphering Musk’s esoteric Internet postings” in order to use them against him; (2) as many as 100 of Wachtell’s 250 lawyers might have worked on the case; and (3) Twitter’s legal bills could approach $100 million.
Presumably Musk was none too pleased with Gadde and Edgett for the roles they played in forcing him to buy Twitter. Taking a page from Shakespeare’s book—“the first thing we do, let’s kill all the lawyers”—one of Musk’s first actions as “Chief Twit” was to fire Gadde and Edgett. Under the “golden parachute” provision of the merger agreement, the firing should trigger payments to Gadde estimated at anywhere from $55 million (per Reuters) to $74 million (per MarketWatch)—on top of the millions she earned over the years from working at Twitter, including $17 million in 2021. But she might have to fight for the money, just as Twitter had to fight for the merger: per The Information, Musk is claiming he fired Gadde and certain other top execs “for cause,” which would relieve him of the obligation to make golden-parachute payments.
[UPDATE (12:58 p.m.): Apologies—I should have included Simpson Thacher as well in the congratulations. As one reader of mine, a retired giant of the M&A bar, wrote to me, “You left out Alan Klein and his Simpson Thacher colleagues, who drafted the merger agreement for Twitter and represented the company brilliantly throughout!” Indeed, the careful drafting of the merger agreement is what made it so difficult for Musk to prevail in litigation, driving him to settle.]
Other lawyers in the news:
L’Affaire Mar-a-Lago continues, with more developments expected after next month’s midterm elections. In the meantime, in a sign that the U.S. Department of Justice (“DOJ”) means business, veteran national-security prosecutor David Raskin has joined the DOJ team working on the case.
Maine lawyer Donald F. Brown wasn’t a fan of continuing legal education (“CLE”), so he sent his assistant to CLE in his place. Don’t try this at home, kids.
John Jay Osborn Jr.—author of the celebrated law-school novel The Paper Chase, which he wrote as a 3L at Harvard Law School—passed away at 77.
Jeanie Cogill, an executive compensation and employee benefits partner at King & Spalding, passed away at 61.
May they rest in peace.
Judge of the Week: Judge Benjamin Beaton.
Are you tired of addressing judges as “Your Honor”? Well, so is Judge Benjamin Beaton (W.D. Ky.).
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