Business, Economics, and Taxes: Capitalism. Yay? >=(

[Fighting Sioux 23]

So wait, Twitter is going to be insolvent right? Twitter, the company, is responsible for a good chunk of the loans musk saddled them with. Now they've got no revenue.

Who is left holding the bag on these lawsuits? I assume the employees?

There is an argument to be made that Musk should be personally liable, given what appears to be a fairly obvious breach of fiduciary duty.

 

[dxmnkd316]

Yeah, California's WARN Act is much harsher than the Federal WARN Act. IINM, it's up to $500 / day / violation, coupled with benefits (and medical expenses incurred due to lost health insurance) and attorney fees.

This has class action written all over it, and Musk likely doesn't have much of a defense.

Assuming that Twitter had 7500 employees, and laid off 50% (or 3750), that is a potential civil fine of $1.875 million per day, plus benefits. Coupled with the 60-days in wages (average Twitter employee makes around $150k, so 60 days = just under $25k / employee, or approximately $93 million for 3750 employees), and the lawsuit's value tops $100 million pretty quickly. Oh, and the employees would also get their attorney fees under the Act.

Fun times.

So basically divide by 0.7 of whatever the cost is to get the final tally after lawyers?

 

[dxmnkd316]

There is an argument to be made that Musk should be personally liable, given what appears to be a fairly obvious breach of fiduciary duty.

Ha, I hadn't even thought of that angle. Because I think you can point a pretty damn clear line right to Musk. It's obvious he's pulling every string. I wonder, is there any liability for the other execs who are pushing these buttons?

 

[Fighting Sioux 23]

So basically divide by 0.7 of whatever the cost is to get the final tally after lawyers?

Probably pretty close to that. I don't practice in California, but I would assume they at least factor in the Lodestar method (take the number of reasonable hours expended and multiple by a reasonable hourly rate). I would imagine the hourly rates would range from $3-400 to perhaps around $1,000 / hour (depending on the experience of the attorney). Averaged out at say $600 / hour, it would all come down to how many hours it took to prosecute the case.

 

[Fighting Sioux 23]

Ha, I hadn't even thought of that angle. Because I think you can point a pretty damn clear line right to Musk. It's obvious he's pulling every string. I wonder, is there any liability for the other execs who are pushing these buttons?

Potentially. Most executives have at least some type of fiduciary duty to the company.

What will be interesting is when they make a D&O claim under their policy, how the insurer handles it. That will be its own separate (and far less sexy) litigation (most likely).

ETA: They censor $exy, but I can say fuck all I want. Crazy.

 

[unofan]

So basically divide by 0.7 of whatever the cost is to get the final tally after lawyers?

With few shifting statutes, you generally have to prove the reasonableness of the fee, so it'll more likely be actual based on billable hours rather than the contingency.

But they're not under any pressure to keep costs artificially low or provide discounts, so it would be the full freight bill.

 

[Fighting Sioux 23]

With few shifting statutes, you generally have to prove the reasonableness of the fee, so it'll more likely be actual based on billable hours rather than the contingency.

But they're not under any pressure to keep costs artificially low or provide discounts, so it would be the full freight bill.

And can you imagine how much work it would take to prosecute a class action for 3750 employees? That's going to take a shit-ton of work.

 

[Handyman]

I think it's a safe assumption that anyone bleating that line also votes R, even though they may not wear a red hat. They're just smart enough to not outright out themselves.

I forgot to add who is bleating that line which is the media. They are the ones whining about silent quitting more than abortion.

 

[dxmnkd316]

I have to assume the entire company is under preservation orders now, rigth?

 

[Handyman]

I honestly think he's dumb. Actually dumb. But statistics are neat. If everyone on earth flips a coin daily, someone will hit heads 32 times in a row. I think he's the moron who actually did.

(I do agree that it must be true that all billionaires have flipped a coin heads an improbable number of times in a row. That must be true.)

Well this is the guy who agreed to buy the company without any research or due diligence then backed out to try and tank the stock only to burn more money and buy it for the original price and deal. Even Trumps current attorneys would have advised against that.

 

[Jimjamesak]

I forgot to add who is bleating that line which is the media. They are the ones whining about silent quitting more than abortion.

The ruling knows there’s a bubbling of working class resentment and push to organize. They’re using their media pawns to try to silence it.

 

[dxmnkd316]

Well this is the guy who agreed to buy the company without any research or due diligence then backed out to try and tank the stock only to burn more money and buy it for the original price and deal. Even Trumps current attorneys would have advised against that.

That's the thing that blows my mind. Wasn't there a $1B back out fee? Couldn't he have just coughed up one half of one percent of his net worth and said, "Nah, fuck it" and then made it all back with "THE WOKE LEFT MOB SCREWED ME!!!!!"

 

[Handyman]

I have to assume the entire company is under preservation orders now, rigth?

I would bet on it yes.

 

[LynahFan]

Yeah, California's WARN Act is much harsher than the Federal WARN Act. IINM, it's up to $500 / day / violation, coupled with benefits (and medical expenses incurred due to lost health insurance) and attorney fees.

This has class action written all over it, and Musk likely doesn't have much of a defense.

Assuming that Twitter had 7500 employees, and laid off 50% (or 3750), that is a potential civil fine of $1.875 million per day, plus benefits. Coupled with the 60-days in wages (average Twitter employee makes around $150k, so 60 days = just under $25k / employee, or approximately $93 million for 3750 employees), and the lawsuit's value tops $100 million pretty quickly. Oh, and the employees would also get their attorney fees under the Act.

Fun times.

That's big money to you or me, but to Musk, that just means it cost him $44.1B to buy the company instead of $44B. He wouldn't lose a wink.

 

[dxmnkd316]

Potentially. Most executives have at least some type of fiduciary duty to the company.

What will be interesting is when they make a D&O claim under their policy, how the insurer handles it. That will be its own separate (and far less ****) litigation (most likely).

ETA: They censor $exy, but I can say fuck all I want. Crazy.

FOllow-up: Is there any fiduciary duty for a private company? I suppose it depends on the structure of the company's shares. BUt I'm assuming the Saudis aren't dumping $2B into a fund that doesn't have a fiduciary duty to the fund. Even if that's not "new" Twitter.

 

[Fighting Sioux 23]

That's big money to you or me, but to Musk, that just means it cost him $44.1B to buy the company instead of $44B. He wouldn't lose a wink.

Perhaps not (although, $100 million is probably a starting point...with everything, it could extend upwards to closer to a quarter billion--your point still being made). Of course, exemplary damages come into play, which could change that calculus.

 

[Fighting Sioux 23]

FOllow-up: Is there any fiduciary duty for a private company? I suppose it depends on the structure of the company's shares. BUt I'm assuming the Saudis aren't dumping $2B into a fund that doesn't have a fiduciary duty to the fund. Even if that's not "new" Twitter.

Typically, so long as there is some type of shareholder/creditor/financier, the director(s) of such company owe a fiduciary duty to such shareholders/creditors/financiers.

 

[Handyman]

Well the way he is whining on Twitter right now or seems he is worried about this boondoggle...

 

[FadeToBlack&Gold]

It isnt just the MAGAs...they care more about the fake "silent quitting" phenomenon than they do about fucking abortion.

As if no Boomer has ever "silent quit" a job, lol. They're all fuckin' hypocrites.

 

[SJHovey]

Perhaps not (although, $100 million is probably a starting point...with everything, it could extend upwards to closer to a quarter billion--your point still being made). Of course, exemplary damages come into play, which could change that calculus.

But if (using your numbers) he lays off 3750 people earning $150k/yr, on average, plus benefits, hasn't he just cut costs by $560 million, plus benefits?

Mind you, I'm not saying what he is doing is right, or wrong. Personally, I don't care since I am neither a Twitter employee nor user. He may literally have no idea what he is doing, but it's my personal opinion that people don't get to where he has gotten as an idiot.