Twitter’s Unpaid Bills Threaten To Be An Even Bigger Problem For Elon Musk

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Twitter's Unpaid Bills Threaten To Be An Even Bigger Problem For Elon Musk

Twitter hasn’t paid for the private flights of Twitter executives. (File)

Small businesses are accusing Twitter Inc. of stiffing them, even as company owner Elon Musk, who has a personal net worth of more than $150 billion, is saying the social network’s finances are finally on the way to recovery.

Twitter is late on more than $10 million of payments to an array of companies that provide services from public relations advice to branded merchandise, according to claims in court filings. In April four vendors filed a joint lawsuit for breach of contract over the company’s allegedly unpaid bills, and are seeking class action status. Since December at least 10 vendors have sued the company on similar grounds. Those vendors include small businesses that say they rely on Twitter’s payments to continue operating.

One of the vendors that joined the suit in April is White Coat Captioning, a small business based in Vermont that’s been providing captioning services for Twitter’s global events since January 2020. “It is nontrivial, $42,000 for a small company like mine,” says Chief Executive Officer Norma Miller. She says Twitter stopped paying the company in October, about two weeks before Musk officially took over. Twitter has fired its public-relations staff and no longer responds to press requests.

At first Miller was able to reach employees in Twitter’s accounts payable department, who apologized for the delayed payments. But her point of contact disappeared during the steep job cuts of Musk’s early days. At one point, Miller stopped receiving substantive responses, just a rote acknowledgement that her communication had been received. “Eventually, it was clearly just a bot answering us with the same answer over and over again,” she says.

When Twitter stopped paying her company in the middle of a large project, Miller says she resorted to finishing the work by herself, because she couldn’t afford to pay her employees. She says she has stopped taking a salary and is paying some company expenses out of pocket. She’s particularly frustrated, because she’s sure Musk has more than enough money to pay her. “This is about what he pays when he takes his jet from LA to San Francisco for a lunch meeting,” she says.

Then again, Twitter hasn’t paid for the private flights of Twitter executives. Private Jet Services Group, which sued Twitter last year, has said it still hasn’t received payment for almost $200,000 in outstanding bills. The Miami-based company sued Twitter in December and then voluntarily dismissed the case to refile in a different court. “Twitter owes the money, and this is just another Goliath-trying-to-squash-David unfortunate circumstance,” says Greg Raiff, CEO of parent company Elevate Aviation Group. Twitter has said in court filings that it has refused to pay the bills because Private Jet Services breached its contract by providing services that hadn’t been properly approved.

Vendors say the delayed payments seem to be related to Musk’s chaotic leadership, citing the abrupt shift in the company’s behavior once he purchased it. Miami-based public-relations firm Cancomm LLC, which has said in its lawsuit that it’s owed $140,000, says Twitter approved the company’s invoices but never paid them. “We were then advised on several occasions that they were experiencing reorganization and delays,” says Cancomm’s managing partner, Naomi Newton. “We were also passed around to several different people within the organization.” She says this has created an “enormous cash-flow burden.”

The delayed payments aren’t characteristic of Twitter, according to vendors. “In all our years of supporting the good people at Twitter, before new ownership took over, this never happened,” says Raiff.

Twitter has paid or settled with some of its vendors in recent months. The Crown Estate-which manages properties owned by the British monarch-sued Twitter earlier this year over unpaid rent, according to court filings. At some point the social media giant did pay rent at its London office, and the Crown Estate withdrew the suit, according to a Crown Estate spokesperson.

Twitter is also in settlement talks with consulting company Analysis Group and the landlord at its Boston office, according to court filings. It recently settled with Charles River Associates, after the consulting company sued for $2 millionin unpaid services.

Musk has been vocal about how dire Twitter’s financial status has been since he took over, emphasizing repeatedly that the company had only a few months to live when he first purchased it. Since then, he’s painted himself as a savior, firing unproductive employees, cutting unnecessary costs to save the company from supposed bankruptcy and developing a business model that will make it sustainable.

But much of Twitter’s financial trouble is Musk’s own doing. As part of his $44 billion deal to buy the company, he saddled it with more than $12 billion of debt. Twitter will owe about $1.2 billion in interest payments per year, Bloomberg has estimated.

Since Musk took over, advertising revenue has declined by 50%, because advertisers are concerned about how his behavior could damage their reputation. His subscription service, Twitter Blue, has failed to draw users, many of whom are disillusioned by the rise in hate speech and misinformation on the platform. So far, less than 1% of Twitter’s monthly users have signed up.

It’s unclear to what extent the behavior alleged in the lawsuits is related to Musk’s plan to bring Twitter back to financial health. “We are looking forward to showing him that it is far more costly to not pay their obligations,” says Shannon Liss-Riordan, the attorney representing four of the small businesses suing Twitter.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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