Third time’s the charm. Elon Musk’s lawyers may have thought that as they sent the third termination notice to Twitter last Friday in an attempt to end the A $44 billion acquisition of the company. In the last notice filed with the SEC, the Tesla CEO’s legal team objected to Twitter paying severance money to the company’s former security chief Peter “Mudge” Zatko in June — arguing that the action violated a clause in the acquisition agreement.
The notice sent to Twitter mentioned that the deal agreement included a condition that the social network could not pay unusual severance payments or termination payments to “Service Providers of the Company,” including former employees. We’ve reached out to Twitter for comment and will update the story if we hear back.
The Wall Street Journal reported last week that Twitter was in confidential talks $7 million in damages with Zatko leaving the company in January 2022. The social network hired him in 2020 to fix the platform’s myriad security issues. The report notes that Zatko signed a standard nondisclosure agreement while accepting the payout — but that allowed him to speak about the company through whistleblower complaints and congressional hearings.
Complaints of Zatko’s whistleblower to US SEC and FTC came to the fore in July, claiming that the company of poor security practices that could be a threat “to national security and democracy.” In response, Twitter said he was fired in January 2022 for “ineffective leadership and poor performance” and his allegations against the company paint a “false narrative.” These complaints also accused Twitter of accepting fuzzy matrices for measurement to suppress the number of fake accounts on the platform — main problem in the Musk-Twitter legal battle.
After this incident came to light, Musk sent his second termination notice Twitter last month citing Zatko’s revelations, which were not previously known to him. Musk’s legal team also sent Zatko’s subpoena demanding depositions and a ton of documents from Twitter’s former security chief. The billionaire sent his first notice of termination on July 8 after a long battle over the number of spambots on the platform.
Earlier this month, Delaware Court of Chancery Chancellor Kathleen McCormick said Musk could use Zatko’s claims in his lawsuit against Twitterbut denied the request for an adjournment of the trial, which will start on October 17. Musk’s team is trying to use all kinds of arguments, ranging from the number of fake accounts on the service to Twitter’s shady approaches to security and privacy, to get out of A $44 billion acquisition deal.