Twitter faces suits claiming over $14 million in unpaid bills

Since Elon Musk took over, Twitter Inc. has faced a growing list of claims that it hasn’t paid its bills as the social-media company aims to break even this year.

Landlords, consultants and vendors in recent months have made demands for payments in at least nine lawsuits, with their complaints totaling more than $14 million plus interest, The Wall Street Journal reports.

Among those alleging past-due notices is an invoice of almost $7,000 for a “swag gift box for Elon” ordered by Twitter’s marketing department in the days before the $44 billion deal closed on Oct. 27.

In one of the nine lawsuits, the plaintiff sought dismissal and the case closed Friday.

Mr. Musk inherited the bills when he took control more than three months ago and quickly implemented a more austere spending style as part of his signature intensity.

His career before Twitter has included navigating close brushes with financial doom, including Tesla Inc. nearly running out of money. He has managed past financial challenges partly by pressuring suppliers and vendors when conserving cash was paramount.

“What Elon Musk is doing is basically simulating a bankruptcy,” said Van Conway, a restructuring expert who has helped distressed companies for almost 40 years. “He is taking a machete to his costs.”

Twitter and Mr. Musk didn’t respond to requests for comment.

Since late October, Twitter has undergone dramatic changes as Mr. Musk has raced to remake the product of a company with a track record of losing money and slash costs amid an advertiser pullback and deal-related debt expenses. He has cut staff sharply and balked in tweets at spending, including what he said was $13 million a year on employee meals at the company’s headquarters.

Early on, Mr. Musk had complained that the company was losing more than $4 million a day and suggested that bankruptcy was possible. Since then, he has said the company is making progress. “Twitter still has challenges, but is now trending to breakeven if we keep at it,” Mr. Musk said in a Feb. 5 tweet. 

Three of the U.S. lawsuits involve office space, including the company’s headquarters in San Francisco where the landlord has alleged that Twitter failed to make almost $6.8 million in rent payments for December and January. 

Twitter, which is now private, no longer reports its financial details publicly. The company reported last year that it owed $239 million primarily for office space and data center facilities in 2023. 

In a January lawsuit, Canary LLC, a marketing company that specializes in producing the kinds of logo-decorated items ubiquitous among Silicon Valley tech companies, claimed Twitter is behind payment on almost $400,000 for various Twitter-branded swag. 

The company’s court filings included the almost $7,000 purchase order describing a “swag gift box for Elon.” An invoice for the order included a sandblasted logo on a Japanese whisky bottle, an extra-large bomber jacket and more than $250 worth of socks. 

A lawyer for Canary declined to comment. It couldn’t be learned if the items were for Mr. Musk or if he received them.  

Tesla, where Mr. Musk is also chief executive, in 2018 worried its suppliers as it struggled to boost production of the Model 3 compact car. At the time, the company stretched out payment terms to 90 days from 60 days and stopped some payments, The Wall Street Journal reported then. 

Several respondents to a supplier survey then reported Tesla requesting a “large” price reduction on current business and retroactive rebates. Some smaller suppliers took the step of filing mechanic’s liens—legal claims seeking unpaid compensation—against Tesla, alleging unpaid suppliers and services. 

“We’re not behind because we can’t pay them,” Mr. Musk said at the time. “It is just because we’re arguing whether the parts are right.” The company had been working to improve its on-time payments, the Journal reported.

During the early, uncertain days of the Covid-19 pandemic, Tesla reached out to some landlords seeking rent reductions after early quarantine procedures had closed much of its business. The auto maker wasn’t alone in making such requests as companies scrambled to conserve cash. 

At Twitter, some of the alleged unpaid bills relate to work done by the company to close the at-times contentious acquisition deal with Mr. Musk himself.

As the deal came together last fall, Twitter executives were racing to complete it and arranged last-minute charter flights from New Jersey to San Francisco and back for then-Chief Marketing Officer Leslie Berland, according to a lawsuit filed in December in federal court in New Hampshire by Private Jet Services Group LLC seeking $197,725.

After the deal closed, Marty O’Neill, head of Twitter’s global strategic sourcing, emailed the air-charter company, saying Twitter wouldn’t be paying for the flights, court records show. He argued that Twitter wasn’t liable, saying only designated representatives were allowed to book flights through the charter per its contract with Private Jet Services. He didn’t respond to a request for comment. 

Another Twitter worker weighed in on the email chain, according to the court records, to say that former CEO Parag Agrawal had signed off on the flights. “It was an urgent need the week the deal closed, and Leslie was the main person from Twitter liaising directly with Elon,” the person wrote. 

Mr. O’Neill responded: “New management is not going to budge.” 

On Friday, Private Jet Services filed to voluntarily dismiss the case, and the case was terminated. Neither side responded to a request for comment.