A breakdown of Elon Musk's misguided complaint against law firm Wachtell, which received $90M from Twitter for forcing Musk to complete the $44B Twitter deal
Oh Elon — Disclosure! A long time ago I used to work as a very junior mergers-and-acquisitions lawyer at Wachtell, Lipton, Rosen & Katz.
Context & Ripple Effects
This breakdown lands three days after X Corp. sued Wachtell to claw back most of the $90M fee the firm earned defending Twitter against Musk's attempt to walk away from the $44B buyout. The fee traces back to the 2022 fight, when Twitter's lawyers declared Musk's termination 'invalid and wrongful' and the judge kept the dispute anchored to the signed contract — the position that ultimately forced Musk to close.
Bloomberg's verdict that the complaint is 'misguided' matters because it frames the new suit not as a fresh grievance but as a buyer trying to relitigate a fee that was paid under terms Musk himself agreed to when he completed the acquisition.
First-order effects
- X Corp.'s recovery claim runs directly into the fact that the $90M was paid by Twitter under the merger agreement Musk signed to complete the deal, leaving Wachtell holding the fee unless courts accept a post-closing challenge to it.
Second-order effects
- If buyers conclude they can contest target-paid advisory fees after closing, every future hostile-defense engagement by Wachtell and its peers carries a tail risk that the winning fee gets challenged by the very acquirer it helped defeat.
Third-order effects
- The pattern across this coverage — the failed walkaway, the fee-recovery suit, and Musk's separate SEC settlement demand from the buyout probe — points toward acquirers systematically treating target-side professional fees and regulatory fallout as negotiable costs of a contested deal rather than sunk expenses.
The trend: Contested-deal economics are shifting as acquirers like Musk treat the target side's defense fees and regulatory consequences as recoverable or renegotiable, testing how much of a closed merger can be relitigated.