X Drops Lawsuit Against Wachtell After Dispute Over $90 Million Twitter Deal Fee

Elon Musk’s social media company X has officially ended its high-profile lawsuit against Wachtell, Lipton, Rosen & Katz, closing a contentious chapter tied to Musk’s 2022 acquisition of Twitter. According to a Wednesday filing in a California state court, X dismissed the lawsuit with prejudice, meaning it cannot be reinstated. The filing did not elaborate on the reasons behind the decision, and representatives for X have not responded to requests for comment.

The lawsuit, originally filed in 2023, sought to recover a significant portion of a $90 million fee paid to Wachtell. The elite law firm played a central role in defeating Musk’s attempt to back out of his multibillion-dollar deal to purchase Twitter, which he later rebranded as X. Wachtell issued a statement expressing satisfaction with the dismissal, emphasizing that “there was no settlement” and reiterating that it viewed the claims as meritless.

Previously, a judge had determined that the dispute must be resolved through private arbitration, and both parties were expected to update the court in early December. The lawsuit accused former Twitter executives of authorizing excessive “success” and “project” fees just before the acquisition closed. Musk’s legal team argued that these payments violated ethical and fiduciary standards and were improperly granted as the company prepared for the takeover.

Wachtell firmly denied any misconduct. The firm maintained that Twitter’s board had fully approved the compensation for its legal work, which it said was instrumental in forcing Musk to honor the original merger agreement. According to Wachtell, its intensive three-and-a-half-month litigation effort preserved billions in value for Twitter shareholders.

With the case now closed, the dispute marks another legal milestone in Musk’s turbulent management of the platform, underscoring the complex and costly battles surrounding the transformation of Twitter into X.