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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

#81

Post by addaon »

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?

This might have been true on October 26th. It's not obviously true today.

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

#82

Post by sheepscreek »

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?

It’s very likely this isn’t their first time running behind on rent.

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

#83

Post by starkd »

jeffbee wrote: post #28
Bilal_io wrote: post #18

Earlier quoted context omitted.

The case doesn't need to be interesting to warrant highlighting. Musk is the person of interest here. Also, lawsuits are usually a method to force the other party to sit and talk. As an example, Texas law requires mediation before being able to see a judge, including things like divorce. I've heard that between 70% to 80% of cases get settled in mediation (not sure if this statistic is specific to Texas or not)

I don’t know why anyone would think otherwise, but a mediator will simply advise Twitter that they are required to pay the rent. There isn’t a negotiating tactic here that would actually work. A court would order them to pay and damage and costs and fees too. Short of bankruptcy Twitter or any organization is required to perform their end of contracts.

[flagged]

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

#84

Post by woodruffw »

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 assume they’re quick to file lawsuits with larger clients because of the correspondingly larger financial liability involved (large office space, large rent, unclear corporate finances). That seems like a very normal reason to be “fast on the draw,” all incentives considered.

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

#85

Post by sschueller »

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?

Doesn't in default mean they had several reminders to pay and have now defaulted and invalidated their lease agreement?

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

#86

Post by starkd »

TigeriusKirk wrote: post #8
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.

With a fraction of the people, they must only need a fraction of the space. Maybe it's some tactic to renegotiate the lease? Though that seems unlikely to work out.

He's very likely to move Twitter HQ to Texas, like he did with Tesla. It would actually be to his advantage.

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

#87

Post by Zigurd »

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.

There are good reasons to believe that Musk is running low on liquidity. If Musk took any margin debt at all when TSLA was above $200, that's at risk of margin calls. Published reports say Musk is among the most prolific margin borrowers, with a very high percentage of TSLA shares pledged to margin debt.

On top of that, Tesla's board is at risk of a shareholder suit if it does not enforce its own margin debt policy for board members and top management. Elon's brother is also a big margin borrower, and is subject to a 25% limit.

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

#88

Post by phpisthebest »

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…

>>begging people to come back

I dont believe that every actually happened. The most often cited case of that was the twitter thread about badge access which was proven to be a hoax much like Ligma Johnson Devs. The Media however does not fact check anything so any negative stories are just run with no validation

>>Since Elon's takeover of Twitter, it's been one PR disaster after the next.

Only if you are of a certain political persuasion so you see it as PR Disaster.

>>Mass layoffs

Those were need badly

>>cutting in-office catering

Also should have been cut, and never offered

>>the whole Twitter Blue debacle,

I agree here, probably the only thing we agree on

>>unbanning some of the worst,

This is what has made twitter fun again....

>> trying to fire the previous executives for cause to avoid golden parachutes

Good they should be, they were terrible at their job and should not get any golden parachutes

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

#89

Post by hef19898 »

barbazoo wrote: post #50
cozzyd wrote: post #4

Earlier quoted context omitted.

Musk probably fired the guy in charge of paying rent

Simplest explanation, probably right.

That person was totally unproductive anyway. Just image, they barely wrote a single line of code!

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

#90

Post by starkd »

jeffbee wrote: post #35
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…

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.
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