This week, Elon Musk attended the Met Gala in New York City, celebrating "In America: An Anthology of Fashion". While Musk was enjoying the festivities, his company, Twitter, was facing another legal dispute. Writer, Inc., a tech startup, has sued Twitter for alleged failure to pay a vendor. This is the sixth company to sue Twitter since Musk took over about 4 months ago.
Twitter's financial woes have been well-documented since Musk became the sole director, new owner, and CEO of the company. It has been sued for nonpayment by Writer and at least five others, including its landlord in San Francisco, a private jet transportation service provider, an events-planning and production company, an M&A consulting firm, and Analysis Group.
The non-payment disputes are unusual for a leveraged buyout, according to finance professors Edith Hotchkiss and Josh T. White. White noted that the high debt level at Twitter is aggressive for a company with volatile and sometimes even negative free cash flow, while Hotchkiss said they are "more typical of companies that are within a very short window of filing for bankruptcy."
The latest lawsuit is for the relatively humble amount of $113,856. Twitter's Vice President of Product, Trust & Safety, Ella Irwin, said the company does not comment on pending litigation or speculation surrounding its financial health. Musk has publicly made light of Twitter's financial issues. It is unclear how the company will move forward in the coming months.