Elon Musk Says Twitter’s $7.75 Million Severance Payment to Whistle-Blower Is Another Reason He’s Justified in Nixing Deal

Elon Musk keeps finding new reasons why he can back out of his $44 billion agreement to buy Twitter.

In a Sept. 9 letter to Twitter, Musk’s lawyers called out the social network’s separation agreement with Peiter Zatko — its former head of security who was fired in January — under which Twitter made severance payments to Zatko and his counsel totaling $7.75 million.

That, according to Musk’s legal team, violated a provision of the acquisition agreement under which Twitter agreed to not “grant or provide any severance or termination payments or benefits to any Company Service Provider other than the payment of severance amounts or benefits in the ordinary course of business consistent with past practice.” The definition of “Company Service Provider” includes Twitter’s former employees, per the letter.

“Twitter did not seek Defendants’ consent under Section 6.1(e) before making this payment nor was this payment disclosed to Defendants,” the letter, disclosed in an SEC filing Friday, said. “In fact, Defendants only learned of this payment when Twitter filed the separation agreement with the court on September 3, 2022.”

Zatko, whom Twitter has characterized as a disgruntled ex-employee, has alleged in SEC and FTC complaints that Twitter concealed ”egregious” security lapses, among other pronlems.

Musk’s lawyers cited Zatko’s allegations in a letter last month as additional evidence that the multibillionaire’s pact to buy Twitter was nullified. In July, he told Twitter he was exiting the deal because, Musk alleged, the company could not prove its claim that spam and fake accounts are less than 5% of active users.

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