Landlord favorite Twitter sued for allegedly not paying rent on Market Square HQ
- Reference: 1675193824
- News link: https://www.theregister.co.uk/2023/01/31/twitter_market_square_lawsuit/
- Source link:
SRI Nine Market Square [1]claims [PDF] that Twitter not only owes $6.8 million in unpaid December and January rent, but that it also failed to abide by the terms of its lease, which required an additional $10 million deposit into its letter of credit (LOC) if control of the lease changed.
While the lawsuit implies Twitter simply ignored requests to pay rent, Market Square said Twitter flatly refused to increase the LOC when Twitter's lease was transferred to Elon Musk.
[2]
The suit outlines a number of attempts to get Twitter to pay its headquarters rent after being rebuffed on requests for the LOC increase, each of which ended in Twitter "not, within the time specified in the notice of default or at any other point thereafter, pay[ing] the monthly rent and additional rent due," the suit alleges.
[3]
[4]
After drawing on the LOC to pay the entirety of the December rent and emptying it of an additional $265,515 to settle a portion of January's bill, the suit alleges Twitter hasn't replenished the amount withdrawn, as is also required under the lease.
After all that, Market Square said it hasn't terminated Twitter's right to possession of the building, and it doesn't appear to want to either. In its prayer for relief, Market Square asks for its back rent, the $10 million addition to the LOC and other compensation – but there's no mention of eviction.
[5]
Musk's tactic of not paying the bills has earned Twitter several other lawsuits since he took over in October. The landlord at another of Twitter's San Francisco offices has [6]sued for back rent , as has the British monarchy, whose Crown Estate manages buildings in the UK, including [7]those where Twitter resides .
[8]Musk: Tesla's doing great. I mean, have you seen my Twitter follower count?
[9]British monarchy goes after Twitter, alleges rent not paid for UK base
[10]Twitter stiffed us on $2m bill, claim consultants in lawsuit
[11]Twitter starts auction to flip the bird, furniture, pizza ovens, gadgets galore
Twitter has also apparently been getting into the habit of stiffing people for services rendered. Consultancy firm Charles River Associates sued the company last week, alleging it was [12]owed $2 million .
Cash isn't going out – is it going in?
Musk said when he purchased Twitter that the company was losing [13]millions of dollars a day , and the [14]decisions he made early in his tenure are unlikely [15]to have changed that – if anything, the opposite may have happened. In the chaos of the early Twitter-under-Musk days, [16]advertisers fled from the platform, and it's not entirely clear if they've [17]bothered to return .
Twitter has also [18]reportedly just made its first $300 million interest payment for the $13 billion in debt Musk saddled the company with when he bought it, so the coffers are probably even emptier.
The company has apparently been pushing ahead with plans to [19]become a payment platform , with the Financial Times reporting that Twitter has applied for regulatory licenses in multiple US states and is building out software to introduce such functionality.
Musk has [20]talked about turning Twitter into a "super app" previously, but even that's a fallback for the serial CEO – his very first endeavor, [21]x.com , was founded in 1999 and is what brought him into the PayPal fold in the first place.
[22]
"Buying Twitter is an accelerant to creating X, the everything app," Musk [23]said in October prior to his Twitter purchase being finalized, but thus far X may be taking a backseat to keeping Twitter afloat. ®
Get our [24]Tech Resources
[1] https://regmedia.co.uk/2023/01/31/twitter-market-square-lawsuit.pdf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y9mdkdD6s08-J3y6GuA5qQAAAIY&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y9mdkdD6s08-J3y6GuA5qQAAAIY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y9mdkdD6s08-J3y6GuA5qQAAAIY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y9mdkdD6s08-J3y6GuA5qQAAAIY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2023/01/03/elon_musks_costcutting_campaign_at/
[7] https://www.theregister.com/2023/01/24/monarchy_chasing_twitter_rent/
[8] https://www.theregister.com/2023/01/26/tesla_boasts_record_year_conveniently/
[9] https://www.theregister.com/2023/01/24/monarchy_chasing_twitter_rent/
[10] https://www.theregister.com/2023/01/23/twitter_consultant_lawsuit/
[11] https://www.theregister.com/2023/01/16/twitter_auction/
[12] https://www.theregister.com/2023/01/23/twitter_consultant_lawsuit/
[13] https://www.theregister.com/2022/11/09/musk_sells_nearly_4_billion/
[14] https://www.theregister.com/2022/11/11/twitter_musk_week/
[15] https://www.theregister.com/2022/11/11/musk_brands/
[16] https://www.theregister.com/2022/11/02/advertisers_twitter_concerns/
[17] https://www.theregister.com/2022/12/02/twitter_advertising_push/
[18] https://www.ft.com/content/32568ca1-464b-4fcf-8694-44be6be3d686
[19] https://www.ft.com/content/9d84d534-b2dd-4cff-85d1-aee137b26a45
[20] https://www.theregister.com/2022/12/07/microsoft_super_app/
[21] https://www.theregister.com/2022/12/07/microsoft_super_app/
[22] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y9mdkdD6s08-J3y6GuA5qQAAAIY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[23] https://twitter.com/elonmusk/status/1577428272056389633
[24] https://whitepapers.theregister.com/
Re: Twitter is still a company?
Seems it was a term of the lease that significant changes in ownership required them to put more money into escrow.
I can see why a commercial landlord would do that, changes in ownership are very risky.
Re: Twitter is still a company?
'Just with different management. What has changed?'
As Elmo has so amply demonstrated, EVERYTHING changed. Twitter went from super stable, a good reliable tenant, to being run by an angry capricious toddler who doesn't pay his rent and doesn't even clean the place (he fired all the janitors) so now it's (half literally) a stinking shithole.
This is why lease contracts usually include clauses about major change of ownership.
The company has apparently been pushing ahead with plans to become a payment platform
TwitterPay : The payment platform that doesn't pay its bills!
Sounds trustworthy.
Payments are optional, unless you're a customer
I'm wondering if Musk is doing some sharp financial engineering. He's overpaid, and one way to reduce costs is to engineer a ch.11 bankruptcy, with that juicy creditor protection. That way, creditors and shareholders take a large haircut, but costs are drastically reduce. Company emerges from ch.11 restructuring with a lower cost base and overheads, and tries again.
So I'm thinking Musk might be trying to engineer this. Loses the rent case, pleads poverty, defaults, washes everything through Ch.11 and emerges again. And as he's the main creditor, give or take any banks, it seems manageable. If the courts go along with it, and he's still got plenty of money to pay lawyers, even if Twitter does not. Could also be a useful test-run for when this becomes necessary for Tesla, Spac-X etc.
I already have one program that does everything. It's called a web browser, and I'm already pretty cagey about that.
It's an asian thing
(Mainland) Chinese love their giant catch-all apps (WeChat, etc), that will do your social media, your banking, your shopping, your rideshare, your food delivery, mass surveillance, realty and rent, personal loans, etc. etc. all in one, because they give zero f@#$s about personal privacy and having a giant evil vampire squid tech company knowing every single thing about you. South Korea has one too (Kakao). Tech giants in the West (and India, etc.) are always salivating at the idea of making one in their market because if you can pull it off your customers are completely locked in and it's the ultimate in rentseeking.
But I think if it were possible in the West Facebook would have already done it, since they're the epitome of giant evil vampire squid tech company. We mostly aren't fans of being locked in to one company to rule our lives - Apple is the closest some people come, and Apple doesn't care for the conglomerate penalty.
Twitter is still a company?
Quote from OA
...when Twitter's lease was transferred to Elon Musk
I'm a bit confused here (it does not take much these days).
Mr E. Musk bought the Twitter company from its shareholders. Twitter is still the tenant. Just with different management. What has changed?
Or do the directors have to sign the lease or something strange in the USA?