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Twitter Sued for Nonpayment of Rent on San Francisco Office

bloomberg.com

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

#101

Post by thinkindie »

phpisthebest wrote: post #77
rsfern wrote: post #68

Earlier quoted context omitted.

According to the landlord Twitter is supposed to have been “in default” on their lease as of Dec 21. It’s like the second sentence of the Bloomberg article we’re commenting on, before the subscription fold.

I would be interested in knowing how many other tenants this landlord has chosen to file suit on when the tenant is 7 days over due (in default in 21st, filed the suit on the 29th)? Seem very aggressive. I wonder if politics has any bearing on their choice to file? Or the fact that Elon has publicly been considering closing the SanFran HQ?

I don't understand the urge to see politics everywhere, even in a normal business practice.

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

#102

Post by dathinab »

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.

In some countries delaying filling for insolvency this way is a crime which is hold against the person responsible for it (instead of the company).

So I'm not sure this is the case tbh. but I'm also not sure if this applies here and I don't know the respective US laws.

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

#103

Post by Zigurd »

starkd wrote: post #90
jeffbee wrote: post #35

Earlier quoted context omitted.

What a completely bizarre interpretation of contract law. Lessors may be in a bind after the lease expires, but during the term of the lease they are entitled to its terms. Nobody can simply stop performing the terms of a lease, outside of bankruptcy.

The point is they want them to renew the lease. He is likely to move it anyway, if SF keeps harassing him. They recently did inspections and threatened him with eviction.

Odd how enforcing standards is "harassing."

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

#104

Post by nrp »

It’s not made obvious by the article, but this lawsuit is for non-payment on a lease of one floor of 650 California St, not for non-payment on the 1355 Market St headquarters. They are also not paying rent at the latter, so presumably another lawsuit is coming. My assumption though is that they have already vacated the now extraneous space at 650 California and will settle with the landlord to break the lease.

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

#105

Post by MonkeyMalarky »

maxclark wrote: post #53
jeffbee wrote: post #35

Earlier quoted context omitted.

What a completely bizarre interpretation of contract law. Lessors may be in a bind after the lease expires, but during the term of the lease they are entitled to its terms. Nobody can simply stop performing the terms of a lease, outside of bankruptcy.

Enforced how? Sure you have a contract but you need to enforce it. So you have to sue which takes time - a lot of time. Then you “win” but the other party can still not pay, or they could appeal - back to court and even more time. The landlord has an iron clad contract sure - but Twitter has what they want ($) and the leverage as a result.

The way you describe it, it sounds like you think he's being smart. I wonder if you and all the others with a similar opinion feel the same about residential tenets who don't pay their rent?

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

#106

Post by simplicio »

maxclark wrote: post #53
jeffbee wrote: post #35

Earlier quoted context omitted.

What a completely bizarre interpretation of contract law. Lessors may be in a bind after the lease expires, but during the term of the lease they are entitled to its terms. Nobody can simply stop performing the terms of a lease, outside of bankruptcy.

Enforced how? Sure you have a contract but you need to enforce it. So you have to sue which takes time - a lot of time. Then you “win” but the other party can still not pay, or they could appeal - back to court and even more time. The landlord has an iron clad contract sure - but Twitter has what they want ($) and the leverage as a result.

I mean, the article is about the landlord suing Twitter, so the question of how they plan to enforce the terms of the lease seems to have been answered.

Note the landlord here is a big national firm. They're not going to be scared off by having to take things to court, and even beyond the $ at stake, they're pretty highly incentivized not to let customers wriggle out of paying leases just because there'd be lawyers involved in enforcement.

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

#107

Post by 082349872349872 »

skippyboxedhero wrote: post #67
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.

That wouldn't happen in this case because there would still be residual value in the equity. Is Twitter worth $45bn? No. Is Twitter worth more than the $13bn in debt? Yes. In this case, they can file, rollover the debt into a new company with no financial loss and then recap the equity with Musk (who obviously has the money to do so) and other shareholders. Also, the banks who own the debt do not want to run Twitter.…

> Is Twitter worth more than the $13bn in debt?

The banks who own the debt* do not believe so.

[Edit: early article postulating 20% writedowns https://www.reuters.com/markets/us/musks-banks-book-twitter-...

recent news with 50+% as a more appropriate writedown than 20% https://www.reuters.com/technology/fidelity-marks-down-value...

* because they haven't been able to sell it to anyone]

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

#108

Post by dathinab »

tonystubblebine wrote: post #7
naveen99 wrote: post #5

Earlier quoted context omitted.

Twitter could just declare bankruptcy and restructure.

I agree this is where things are headed. Is it a sure thing that Elon maintains control in a restructuring?

Idk. about the US but normally during a restructuring the company is placed under control of a bankruptcy trustee.

So at least temporary he would lose control.

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

#109

Post by giaour »

starkd wrote: post #79
jmyeet wrote: post #69

Some claim Twitter is attempting to renegotiate. That may well be true. But this doesn't fit in well with the greater narrative. Since Elon's takeover of Twitter, it's been one PR disaster after the next. Mass layoffs, begging people to come back, cutting remote work, cutting in-office catering, the whole Twitter Blue debacle, unbanning some of the worst, the drop of advertising spend on Twitter (which, at least in p…

They had to cut costs to keep away from the "fast lane to bankruptcy". When not pulling in enough revenue, you have to act quickly. https://youtu.be/HE5CTKqWEV0?t=3570 Wasn't twitter supposed to stop working by now? They are still functioning, despite the layoffs. Maybe it worked?

> Wasn't twitter supposed to stop working by now? They are still functioning, despite the layoffs. Maybe it worked?

I still expect it to stop working gradually, then all at once. Saying that the fact that Twitter hasn't collapsed yet means the previous staffing level was not justified is a bit like saying you shouldn't have paid a builder to put in a foundation because your house hasn't fallen down yet.

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

#110

Post by amalcon »

phpisthebest wrote: post #77
rsfern wrote: post #68

Earlier quoted context omitted.

According to the landlord Twitter is supposed to have been “in default” on their lease as of Dec 21. It’s like the second sentence of the Bloomberg article we’re commenting on, before the subscription fold.

I would be interested in knowing how many other tenants this landlord has chosen to file suit on when the tenant is 7 days over due (in default in 21st, filed the suit on the 29th)? Seem very aggressive. I wonder if politics has any bearing on their choice to file? Or the fact that Elon has publicly been considering closing the SanFran HQ?

The fact that Twitter currently has loan payments in excess of last year's profits could be a factor. Delaying means they will be more likely to be entangled in a bankruptcy and potentially get a worse outcome if they are. Even a low probability bankruptcy would encourage some urgency.
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