Twitter stops paying software vendor $8 million Twitter has refused to make required payments since Musk took office, complaint says

Twitter has failed to pay a $1,092,000 bill on a software contract that expires in 2024, the complaint says, and the Elon Musk-led company apparently won’t pay the supplier $7 million in additional payments. Imply Data, Inc. sued Twitter in California Superior Court, San Francisco, alleging breach of contract.

Imply Data Inc. says that after paying bills totaling about $4.4 million under a custom software services agreement that runs through 2024, Twitter defaulted on its Nov. 30 quarterly invoice and reneged on its commitment to pay future bills. San Francisco County Court. Imply estimated its damages at more than 8 million dollars.

A few days ago, Twitter was sued by the private jet provider for refusing to pay nearly $200,000 for two flights taken by its former marketing director, as Musk’s $44 billion purchase of the social media platform nears completion.

It’s been a tumultuous time for the company under Musk’s leadership, with massive layoffs, advertisers fleeing and prominent users leaving the platform, as well as the suspension of accounts of journalists critical of Musk. As the bills mounted, Musk told employees to renegotiate prices with vendors and suppliers and threatened to take the brunt of his other jobs if things didn’t go as planned, Bloomberg reported last week.

Imply, a company founded in 2015 and based in Burlingame, California, said its lawsuit is a clear example of Twitter’s refusal to pay what it owes other companies without reason.

In the lawsuit, Imply said Twitter paid the software company more than $10 million in four years before Musk’s arrival and was always satisfied with Imply’s product and its technical and support services. In the middle of 2021, a decision was made to extend the contract for another three years.

Quote sent by overview of the complaint

According to reports, Twitter has refused to pay its vendors and suppliers for no apparent reason after being bought by the world’s richest man, Elon Musk. This trial involves such a brilliant case. For more than four years, Imply has been licensing its proprietary Twitter software, and Twitter has paid Imply more than $10 million. Twitter has always been very pleased with the Imply product and its associated maintenance and support services.

Thus, in mid-2021, the parties extended the term of the software license and service agreement from 1 year to three additional From October 2021 to September 30, 2024. Twitter then made first four-quarter payments of $1,092,000, totaling approximately $4.4 million.

However, shortly after Musk’s acquisition of Twitter closed, Twitter refused to pay an outstanding quarterly bill due on November 30, 2022, and Twitter reneged on its obligation to pay Imply’s future bills. Twitter to do this. It was therefore awarded damages in an amount to be proven at trial, but in excess of $8 million plus prejudgment interest and attorneys’ fees and costs.

Imply is developing a database based on open source software Apache Druid, as well as products for managing and monitoring Druid clusters.

“The New York Times” wrote on November 22 that “Twitter” is getting rid of some vendors. Imply’s complaint cites media coverage of Twitter’s refusal to pay vendors and says, “This claim involves such an open case.”

We will no longer pay Imply

Imply uploaded the $1,092,000 invoice to Twitter’s vendor portal, and the invoice was approved by Twitter on Oct. 5, according to the complaint. On Nov. 28, 2022, when Imply logged into the merchant portal, Imply learned that Twitter had removed the invoice and terminated the license agreement, the lawsuit states.

Twitter has also uploaded an internal messaging channel to its Provider Portal to support these moves, Imply says. In its complaint, the company pointed out that the email chain contained a message on Twitter from Martin O’Neill, head of global strategic sourcing, which read: Warning that we will no longer pay Imply. If we could flag any of their invoices in our AP system to not forward them for approval, that would be great, thanks!

Kristena Bravo, the head of Twitter who received the email, forwarded the email to other Twitter staff and wrote: “Can you cancel all Imply invoices (if any) currently held by Oracle and disable the provider using the following email as proof?” related to the complaint.

After reviewing those emails, Imply asked Twitter about the status of the payment on November 30. Twitter’s Accounts Payable Department informed Imply that the invoice had been “cancelled” and that Imply had “reached out to its Business Partner” if it had any concerns. [d’Imply chez] Twitter. Provide Twitter contact to discuss cancellation of invoice; However, Twitter has yet to seriously respond to this request, the complaint states.

Claims damages for breach of contract. Imply expects Twitter’s breach to continue, with the default amount increasing quarterly until the end of the license agreement Twitter’s breach will be proven in court, but likely cost Imply more than $8 million. “, – implied to the court.

Controversy over the possibility of Twitter canceling the contract

The complaint also alleges breach of the covenant of good faith and fair dealing and prior breach of contract: Twitter clearly, unequivocally and completely breached the license agreement by stating that Twitter would not pay Imply and asking its employees not to approve invoices and disable Imply. from the supplier portal. The company assures that Twitter has thereby violated the license agreement.

Twitter may argue that it has the right to terminate the contract earlier. Imply’s complaint states that there is a dispute between the companies over whether Twitter has the right to unilaterally terminate the license agreement before it expires. Imply seeks a declaratory judgment that Twitter does not have that right.

Source: Complaint

And you?

What do you think about this situation? Do you think Twitter is obligated to honor its term contract or not? To what extent?

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