Twitter has been taken to court by a commercial landlord for breach of contract after the tech giant failed to pay rent for one of its offices in San Francisco.
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The lawsuit concerns Twitter's office space at 650 California Street , not its main hub on Market Street . The lawsuit comes after media reports that Twitter's recent owner, Elon Musk , chose to stop paying rent and ordered employees not to pay suppliers in an effort to save costs. With the help of debt financing, Musk was able to buy Twitter for a whopping $44 billion.
Last week, a lawsuit in California Superior Court in San Francisco, alleging that Twitter had failed to pay $136,260 in rent for its office space at 650 California Street. On December 16, this prompted the landlord to issue Twitter a notice to pay within five business days or risk default.
Columbia REIT – 650 California, LLC is asking the court to order Twitter to pay its back rent plus interest and also reimburse its legal fees. After Elon Musk acquired Twitter, the company saw a dramatic reduction in its communications staff. However, when asked to comment on the matter, he has not yet responded.
Columbia's website reveals that it has a portfolio of more than a dozen office buildings located in Boston, New York, San Francisco, and Washington.
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If Elon Musk chooses not to fulfill any of Twitter's financial duties, Daniel Bornstein — a veteran San Francisco -based real estate lawyer who specializes in tenant-landlord conflicts — predicts that this could be the beginning of a series of lawsuits.
But given Elon Musk’s reputation as one of the richest people in the world, office owners will be hesitant to push him too hard. Elon Musk’s considerable resources make Twitter a valuable tenant, especially when he’s obligated or willing to pay. However, landlords who overdo their demands risk losing Musk altogether, leaving their properties vacant for a long time — a more damaging outcome than having to take legal action.
Instead of filing an eviction petition against Twitter in complaint last week, Columbia took no further action, indicating that the owners still view Twitter as an integral part of their business plan.
Bornstein suggested that by refusing to pay rent for the property, Elon may be trying to initiate a renegotiation of the terms of the lease agreement.
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In addition to cutting rent and laying off staff, Musk’s Twitter is also selling off luxury office furniture, appliances and other items from the past, when the company had more than 7,500 full-time employees worldwide. Back then, free lunches were a daily occurrence along with a host of other workplace perks. It is estimated that nearly three-quarters of Twitter’s employees have left the organization, either through layoffs, resignations or resignations.
