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 $6.8 million in unpaid December and January …
Quote from OA
...when Twitter's lease was transferred to Elon Musk
I'm a bit confused here (it does not take much these days).
Mr E. Musk bought the Twitter company from its shareholders. Twitter is still the tenant. Just with different management. What has changed?
Or do the directors have to sign the lease or something strange in the USA?
'Just with different management. What has changed?'
As Elmo has so amply demonstrated, EVERYTHING changed. Twitter went from super stable, a good reliable tenant, to being run by an angry capricious toddler who doesn't pay his rent and doesn't even clean the place (he fired all the janitors) so now it's (half literally) a stinking shithole.
This is why lease contracts usually include clauses about major change of ownership.
I'm wondering if Musk is doing some sharp financial engineering. He's overpaid, and one way to reduce costs is to engineer a ch.11 bankruptcy, with that juicy creditor protection. That way, creditors and shareholders take a large haircut, but costs are drastically reduce. Company emerges from ch.11 restructuring with a lower cost base and overheads, and tries again.
So I'm thinking Musk might be trying to engineer this. Loses the rent case, pleads poverty, defaults, washes everything through Ch.11 and emerges again. And as he's the main creditor, give or take any banks, it seems manageable. If the courts go along with it, and he's still got plenty of money to pay lawyers, even if Twitter does not. Could also be a useful test-run for when this becomes necessary for Tesla, Spac-X etc.
(Mainland) Chinese love their giant catch-all apps (WeChat, etc), that will do your social media, your banking, your shopping, your rideshare, your food delivery, mass surveillance, realty and rent, personal loans, etc. etc. all in one, because they give zero f@#$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.
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.
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.
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
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.
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