Bad Tenant: After Purchasing By Elon Musk, Twitter Is Late On Renting Its Headquarters
A company that owns the building sued the social network and asks for US$ 3.4 million in delayed lease.
The crisis on Twitter does not stop. After losing advertisers, users and massive layoffs, Elon Musk’s company have a new headache. SRI Nine Market Square, the owner of the social network’s headquarters in San Francisco, USA, claims that its tenant is late on rent. As a result, the company filed a lawsuit on Friday (20), requesting US$ 3.4 million unpaid in December 2022 and a similar amount in January 2023.
SRI held a letter of credit with Twitter in the amount of $3.6 million “as security for the defendant’s performance of its obligations under the lease.” However, as the social network did not make the payments, SRI resorted to this letter. But still, $ 3.16 million of the debt is missing.
The venture owner also said that the lease also requires Twitter to increase the letter of credit by $ 10 million after the transfer of control and that such a transfer occurred when Musk bought Twitter in late October.
She also stated that, after the change of control, she asked Twitter to increase the letter of credit by US$ 10 million in November, but the company responded to the notice claiming that it was not obliged to comply.
In addition to the $3.16 million, SRI is demanding payment of late fees and interest on rent owed, as well as damages for breach of contract, and a statement that reiterates Twitter’s obligation to raise the letter.
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This is not the only lawsuit faced by Twitter in the world. A similar situation is happening in London, UK. According to Reuters, “The Crown Estate, the independent trading company that manages the portfolio of properties owned by the monarchy, said on Monday that it had commenced legal proceedings against Twitter over alleged unpaid rent at its London headquarters.”
There are still four other lawsuits about unpaid rent by Twitter ongoing. One of them even runs in San Francisco. Columbia REIT-650 claims the social network failed to pay $136,000 in rent for a building on California Street. The space is leased to a digital advertising company purchased by Twitter in May 2020.
In December, The New York Times reported that sources close to Twitter reported that the non-payment of its offices around the world was aimed at cutting costs.
In addition to lawsuits for being a “bad tenant”, Twitter has been facing several others. Last week, a consulting firm filed a lawsuit seeking payment of $2.19 million in fees when it acted in the lawsuit that forced Musk to acquire the social network. A software vendor and a shipping company are also among the plaintiffs who have also filed lawsuits against the company.
Twitter faces $1.5 billion in annual interest payments on the $13 billion in debt Musk used to fund its acquisition. The first payment “could be due by the end of January,” the Financial Times reported.
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