Twitter Breaches Its Advancement Obligation: Where They Made a Mistake

Twitter Breaches its Advancement Obligation

38. On or about January 13, 2023, Sidley Austin sent three letters by e-mail and Certified U.S. mail to the Company on Plaintiffs behalf, providing notice of Plaintiffs rights to indemnification and to demand advancement of Expenses.

The letters explained that Plaintiffs were involved in certain Proceedings by reason of the fact each Plaintiff was formerly an officer of the Company and confirmed that Plaintiffs had retained Sidley Austin to represent them in connection with the Proceedings.

A true and accurate copy of Agrawal's indemnification and advancement request is attached hereto as Exhibit E. A true and accurate copy of Gadde's indemnification and advancement request is attached hereto as Exhibit F. A true and accurate copy of Segal's indemnification and advancement request is attached hereto as Exhibit G.

39. On or about January 20, 2023, Sidley Austin sent by e-mail and Certified U.S. Mail undertakings signed by each Plaintiff. A true and accurate copy of Agrawal's undertaking is attached hereto as Exhibit H. A true and accurate copy of Gadde's undertaking is attached hereto as Exhibit I. A true and accurate copy of Segal's undertaking is attached hereto as Exhibit J.

40. On or about March 3, 2023, Sidley Austin sent another letter by email and Certified U.S. mail to the Company on behalf of Plaintiffs to reiterate Plaintiffs rights to indemnification and repeat demands for the timely advancement of Expenses (the Follow-Up Advancement Demand).

The Follow-Up Advancement Demand additionally requested that the Company either immediately provide advancement of fees incurred to date or reply with a statement of any bases on which the Company anticipates denying advancement to, or indemnification of, our clients. A true and correct copy of the Follow-Up Advancement Demand is attached hereto as Exhibit K.

41. In connection with the Follow-Up Advancement Demand, Sidley Austin outlined the Expenses incurred by Plaintiffs in the Proceedings and included documentation reasonably evidencing such Expenses, namely detailed invoices with certain redactions made to protect information subject to attorney client privilege, the work product doctrine, or other applicable privileges and protections.

42. On or about March 17, 2023, over two months after Plaintiffs initial demand, outside counsel for the Company responded it was in receipt of Plaintiffs various correspondence. The Company's counsel did not acknowledge its obligation to advance Plaintiffs Expenses. A true and correct copy of the March 17, 2023 e-mail is attached hereto as Exhibit L.

43. On or about March 23, 2023, Sidley Austin responded to outside counsel for the Company, reiterating Plaintiffs rights to timely advancement of their Expenses, and requesting to meet and confer. Sidley Austin's March 23, 2023 letter enclosed additional documentation reasonably evidencing Expenses incurred by Plaintiffs since the time of the Follow-Up Advancement Demand. A true and correct copy of the March 23, 2023 letter is attached hereto as Exhibit M.

44. Pursuant to Section 5 of the Agreements, the Company must advance all Expenses incurred by Plaintiffs “within thirty (30) days after the receipt by the Company of a statement requesting such advance or advances." Ex. B § 5. The Company has acknowledged receipt of Plaintiffs letters, including the Follow-Up Advancement Demand, but as of the date of this Complaint has yet to advance to Plaintiffs their Expenses.

45. As of the date of this Complaint, Sidley Austin has provided invoices to the Company, directly and/or via its counsel, which reasonably evidence that Plaintiffs have incurred Expenses in excess of $ 1million, all of which is required to be advanced to Plaintiffs

46. Agrawal, Gadde, and Segal's Expenses incurred in the Securities Class Action are reasonable in light of their status as defendants and the time spent (among other things):(i) investigating factual allegations;(ii)researching legal theories; (iii) developing a defense; and (iv) planning and preparing motion to dismiss and other legal briefing.

47. Agrawal and Segal's Expenses incurred in the SEC and DOJ Inquiries are reasonable in light of the time spent (among other things): (i) identifying documents subject to retention requests and (ii) corresponding with federal agency staff.

48. Gadde's Expenses incurred in the D'Ambly Lawsuit are reasonable in light of her status as a defendant and the time spent (among other things): (i) investigating factual allegations;(ii) researching legal theories; (iii) developing a defense; and (iv) planning and preparing motion to dismiss briefing.

49. Gadde's Expenses incurred in the Oversight Inquiry are reasonable in light of her status as a witness and the time spent (among other things): (i) corresponding with Congressional Committee staff; (ii) researching legal obligations surrounding Congressional testimony; (iii)researching facts and legal theories related to the subject of the inquiry; (iv) reviewing documents within the scope of the inquiry; (v) preparing and editing hearing preparation materials; (vi) managing compliance with Congressional schedules and rules for hearings; and (vii) preparing for testimony.

50. Plaintiffs have performed all of their obligations under Section 145 of the DGCL, the Bylaws, and the Agreements.

51. Defendant has breached its obligations under Section 145 of DGCL, the Bylaws, and the Agreements by refusing to advance Plaintiffs Expenses.