back to article Landlord favorite Twitter sued for allegedly not paying rent on Market Square HQ

Elon Musk's strategy of cutting expenses at Twitter by not paying bills is coming home to roost. The company's landlords at its iconic Market Square HQ in San Francisco have sued for two months of back rent – and more. SRI Nine Market Square claims [PDF] that Twitter not only owes $6.8 million in unpaid December and January …

  1. keithpeter Silver badge

    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?

    1. Richard 12 Silver badge

      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.

      1. Pascal Monett Silver badge

        As Twitter is currently brilliantly demonstrating.

    2. sarusa Silver badge

      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.

    3. cyberdemon Silver badge

      I assume they must still pay their datacentre bills...

      But for when they don't, there's popcorn

  2. Howard Sway Silver badge

    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.

    1. Jellied Eel Silver badge

      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.

      1. Orv Silver badge

        Re: Payments are optional, unless you're a customer

        That's my theory. Stopping payments to creditors is often the first move in a bankruptcy negotiation. It sets him up to get them to accept a haircut when he declares.

  3. nintendoeats Silver badge

    I already have one program that does everything. It's called a web browser, and I'm already pretty cagey about that.

    1. sarusa Silver badge

      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.

      1. EricB123 Bronze badge

        Re: It's an asian thing

        I worked for a Chinese company in the past, WeChat or don't bother logging on to work. But exactly why should I care. Xi, Zuck, what's the difference?

        I used to worry about privacy, now realize it's totally pointless to care.

        1. Paul Crawford Silver badge

          Re: It's an asian thing

          Get a burner phone for work.

          Or don't work for the Chinese.

        2. nintendoeats Silver badge

          Re: It's an asian thing

          That is a self-fulfilling prophecy. The more people care, the less corpos/governments can get away with.

      2. Orv Silver badge

        Re: It's an asian thing

        WeChat came along when there weren't strongly established players in those markets in China. The US already has half-a-dozen payment apps and most people aren't looking to add another. Unless "X" offers some kind of dramatic improvement consumer inertia will be a big problem.

  4. Pascal Monett Silver badge

    So, now it's the super app

    Musk is abandoning Hyperloop as a front for his "genius" ?

    I'm sure a superapp will cost less, but you need developers and ideas for that - and Musk has neither. It's easy to say that Twitter needs to become everything to everyone, but that's not a game plan, that's just an objective.

    Musk is probably berating this objective every day, telling it to "give 150%" and "not leave the building until you're done".

    Good luck with that.

  5. ecofeco Silver badge

    SOP for the rich

    There is an old saying, "Never do business with princes."

    Why? They don't pay their bills.

    1. John H Woods Silver badge

      Re: SOP for the rich

      I thought Glen Stewart had invented that "Never do business with princes or kings" for his autobiog - does it predate him?

      1. Steve Hersey

        Re: SOP for the rich

        Another, earlier quote with a different angle on the same topic:

        Robert A Heinlein, in the Notebooks of Lazarus Long, wrote: "People who go broke in a big way never miss any meals. It is the poor jerk who is shy a half slug who must tighten his belt."

  6. Anonymous Coward
    Anonymous Coward

    Paying your bills is for the little people

    The elite* need not worry about mere trivialities.

    * YMMV

  7. Steve Davies 3 Silver badge

    Musk is just following the example of his guru

    Donald J Trump

    Quote: Twitter has also apparently been getting into the habit of stiffing people for services rendered.

    There are cities that allowed Trump to have a rally for his 2016 presidential campaign that have still not been paid.

    If you do business with any Musk controlled company, you had better get your money up front or... you could be waiting for a long time.

    This is especially true if he is engineering (sic) to take Twatter into Chapter 11. If you are owed $1,000,000 you had better be prepared to receive a miserly $10.00

    1. Paul Crawford Silver badge

      Re: Musk is just following the example of his guru

      If he claims for ch11 protection, can the creditors contest it based on his actions being wilfully negligent to the company's financial well-being?

      I.e. ask a judge to dismiss it based on it being a deliberate move?

      1. Jellied Eel Silver badge

        Re: Musk is just following the example of his guru

        If he claims for ch11 protection, can the creditors contest it based on his actions being wilfully negligent to the company's financial well-being?

        They can try, but sadly it's a pretty common business tactic. Get enough secured creditors on-side, engineer a default and away you go. Unsecured creditors and shareholders get wiped out, debt gets converted to new shares, and then make bank when the company is flogged off. Usually the biggest challenge is engineering a materiel default so the company is no longer a going concern, unless it's restructured. Arguing it's a result of Musk's negligence would be difficult, but there are probably lawyers who'd give it a try in exchange for fees of course. Creditors that aren't part of the pre-packaged plan would have to pay those, and would just add to their losses.

        I think Musk may have already been hinting in this direction, ie that he'd inherited a basket case that had been consistently losing money, had let costs spiral out of control, and restructuring is the only way forward. Yer honor. It's a process also already so widely abused that there's less of a reputation hit or bankruptcy stigma. Often the opposite, when you get away with it. It's one of the reasons why caution is required contracting with good'ol Delaware LLCs because it happens a lot, and if you're unsecured, that's just too bad. It's capitalism at it's finest. Also possibly not as bad as say, the UK, where our version is to send in the administrators, who extract all the value they can in fees, and move on to the next spot of corpse raiding.

        1. Orv Silver badge

          Re: Musk is just following the example of his guru

          One of the characteristics of bankruptcy in the US is it's easy and seen as a shrewd business movie for corporations, but difficult and shameful for individuals.

  8. arctic_haze

    It is very simple to explain

    He thinks he is above the law.

  9. big_D Silver badge

    Payment service...

    If they can't even pay their own bills, how I am supposed to have confidence in letting them look after my money?

    Yeah, er no thanks.

  10. Arthur the cat Silver badge

    Do everything super apps for the win!

    I presume Musk lives in a house with exactly one item inside that is his TV, washing machine, bed, wardrobe, toilet, coffee maker, dishwasher, computer, frying pan, …

  11. Bitbeisser

    Looks like the musky boi is taking a chapter from Dolt45's business practices. And in turn is probably putting all of his endeavors putting in danger...

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