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Multiple companies have sued Elon Musk-owned Twitter for failing to pay bills. According to the legal and public records database Plainsite, the lawsuits for the non-payment of the bills have piled up since December 2022. In February 2023, four cases were filed against the company.
The latest lawsuit has been filed by a company called Writer, Inc, reports CNBC. The court filing at the California Superior Court in San Francisco shows that Twitter has failed to pay $113,856 to Writer, Inc.
Five other companies who have sued Twitter for non-payment and breach of contract are Blueprint Studios Trends, an events-planning and production company; Private Jet Services Group, which is a private jet transportation service provider; Innisfree M&A, an M&A consulting firm; Analysis Group, which provided litigation-related consulting services to Twitter and its landlord in San Francisco, Columbia REIT.
According to a report by Platformer, Twitter needs to catch up on payments to larger companies as well, including the internal communication platform Slack owned by Salesforce.
Also Read: Twitter Will Charge Users To Secure Accounts Via Text Message: Here’s When It Takes Effect
“We do not comment on pending litigation or various speculation surrounding Twitter’s financial health,” CNBC quoted Twitter’s Vice President of Product, Trust & Safety, Ella Irwin, responding through an email.
CNBC quoted Vanderbilt University finance professor Josh T. White saying that litigation over vendor non-payment could be the result of an incorrect and aggressive capital structure.
“Using more debt and less equity reduces the amount of liquid cash Musk, and his equity co-investors had to contribute at closing, which can potentially generate a higher internal rate of return if the company turns out to be profitable,” White said.
Musk purchased Twitter for $44 billion. The social media company posted a net loss of $270 million in the second quarter that ended June 30, 2022, compared to a profit of $66 million in the same period the previous year.
Musk is aiming to reduce the company’s costs, not only because Twitter is facing a high cash burn rate, but also because Musk needs to repay the debt raised for his takeover bid.
Twitter laid off thousands of workers in November 2022 in departments across the company, a move justified by Musk.
Photo: Shutterstock
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Image and article originally from www.benzinga.com. Read the original article here.