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Twitter Sued for Nonpayment of Rent on San Francisco Office

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Re: Twitter Sued for Nonpayment of Rent on San Francisco Office

#41

Post by skippyboxedhero »

salawat wrote: post #20
xqcgrek2 wrote: post #17

Seems HN is does not have expertise in this and who holds the cards in the current market in SF. The lease previously negotiated by the past regime has little relevance as Twitter is currently occupying less than 50% of the floor space. The landlord has to either accept lower payment, or look for a new tenant and Twitter moves to Austin. Given the current environment in SF, it's likely a new tenant won't be found for…

That's cool. That doesn't excuse squatting, and a good faith effort requires reconvening at the negotiating table to formulate new terms; not just ghosting and coasting until the landlord engages in litigation, or holding somebody else over a barrel.

In my experience, that is almost never how it works.

Landlords have to take a hard line. They negotiate with a tenant and then the whole building stops paying rent the next week.

The same thing is happening in retail as offices. Rents are, mostly, way higher than the market and landlords are quite happy for that to continue. Eventually the market is going to crack, I think everyone has acknowledged that...but landlords aren't going to be the ones to crack it themselves.

Re: Twitter Sued for Nonpayment of Rent on San Francisco Office

#42

Post by mschuster91 »

romellem wrote: post #2

Is the calculation just that the cost of litigation will be less than the full contract lease? I don’t understand how that could work.

I have no idea about the contracts, but I could imagine a scenario where Twitter signed a 10 year lease that's expiring in five years or more, and Musk believes / hopes that being enough of an arsehole will lead the landlords to just dropping the contracts instead of risking a multi-year court battle - even if the landlords would eventually win the lawsuit, it will be a risk on their balance the whole time, whereas Musk doesn't have to answer anyone but his creditors about the lawsuit risk.

Re: Twitter Sued for Nonpayment of Rent on San Francisco Office

#43

Post by mikro2nd »

hn_go_brrrrr wrote: post #38
nostrademons wrote: post #26

Earlier quoted context omitted.

Usually not. Typically in a bankruptcy the debtholders become the new shareholders and then replace existing management with ones more friendly to their interests.

At which point Musk wouldn't own Twitter anymore, like he wanted. It sounds crazy, but is this his exit strategy?

How does he recover 44B this way?

Re: Twitter Sued for Nonpayment of Rent on San Francisco Office

#44

Post by raverbashing »

hn_go_brrrrr wrote: post #38
nostrademons wrote: post #26

Earlier quoted context omitted.

Usually not. Typically in a bankruptcy the debtholders become the new shareholders and then replace existing management with ones more friendly to their interests.

At which point Musk wouldn't own Twitter anymore, like he wanted. It sounds crazy, but is this his exit strategy?

I dunno, I can think of cooler ways of disposing 44bi $, preferably in a non-reputation damaging way

Re: Twitter Sued for Nonpayment of Rent on San Francisco Office

#45

Post by autophagian »

joegahona wrote: post #24

> Twitter hasn’t paid rent on its headquarters, or any of its other global offices, in weeks, the New York Times reported on Dec. 13. Isn’t rent paid once per month? When I was a renter, this could’ve been said about me literally every month, once two weeks had elapsed between payments.

It likely means that the rent payment is overdue by weeks.

Re: Twitter Sued for Nonpayment of Rent on San Francisco Office

#46

Post by [deleted] »

joegahona wrote: post #24

> Twitter hasn’t paid rent on its headquarters, or any of its other global offices, in weeks, the New York Times reported on Dec. 13. Isn’t rent paid once per month? When I was a renter, this could’ve been said about me literally every month, once two weeks had elapsed between payments.

[deleted]

Re: Twitter Sued for Nonpayment of Rent on San Francisco Office

#47

Post by rgbrenner »

Bilal_io wrote: post #19
naveen99 wrote: post #5

Earlier quoted context omitted.

Twitter could just declare bankruptcy and restructure.

Filing bankruptcy doesn't sheild them from a judge order to empty the building, right?

It does. The rent due under the lease is debt, and creditors cannot take action to collect debt while the debtor is in bankruptcy.

https://www.law.cornell.edu/uscode/text/11/362

https://www.law.cornell.edu/uscode/text/11/365

Edit: here's an easier to read article: https://www.jdsupra.com/legalnews/what-to-do-when-commercial...

Re: Twitter Sued for Nonpayment of Rent on San Francisco Office

#48

Post by jsnell »

nostrademons wrote: post #25
romellem wrote: post #2

Is the calculation just that the cost of litigation will be less than the full contract lease? I don’t understand how that could work.

Litigation takes years to play out, paying the lease would result in bankruptcy imminently. Plan is to live another day, long enough to stabilize finances, and then unload it on the public markets where the litigation becomes somebody else's problem.

This is Musk stiffing a supplier for $100k. That seems unlikely to make their bankruptcy any more imminent.

But it does signal (on the record, not just rumours) to literally anybody that Twitter is doing business with that they are distressed, and should be extended no credit. Payment up front, or no service.

Re: Twitter Sued for Nonpayment of Rent on San Francisco Office

#49

Post by propogandist »

kibwen wrote: post #16
MrMan wrote: post #6

it should be easy to recapitalize Twitter using sales of Tesla stock, so I cant believe its an actual shortage of cash. Probably trying to game the litigation cycle and pay at the very last minute? But to what end, it seems like a doomed game to play, you either have money coming in or you dont.

Tesla stock is down 69% (yes, really) over the past 12 months, and part of what's triggering the price collapse is Musk's own sell-off. When a CEO divests from their company, markets historically do not react with confidence. The more Elon Musk sells, the less value he has and the more stock he'll have to sell the next time that he wants to leverage his wealth to buy something pointless.

Tesla surged pointlessly during the pandemic, as with many stocks. Stock valuations are dropping across the board.

Amazon rallied too, and even though it has 2X revenue and built a large moat since covid lockdowns, their current stock price resembles what it is was in Jan 2020.

Re: Twitter Sued for Nonpayment of Rent on San Francisco Office

#50

Post by barbazoo »

cozzyd wrote: post #4
romellem wrote: post #2

Is the calculation just that the cost of litigation will be less than the full contract lease? I don’t understand how that could work.

Musk probably fired the guy in charge of paying rent

Simplest explanation, probably right.
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