Musk really is the ultimate deadbeat. Does he think these obligations just go away if you stop meeting them?
If you're lucky, you can negotiate an "out" clause, where, given sufficient notice, you can terminate the lease early, but commercial landlords are very hesitant to do it.
There's a reason Start-ups love month-to-month co-working spaces.
But if you’re on the hook for the full amount either way, why not just leave early and hand over the key? There’s less that could go wrong that you’d be responsible for, the space isn’t just sitting unused, and the owner has an opportunity to market it earlier.
Everyone walks away better for it. Plus you don’t have the negativity and expense of a lawsuit or an eviction or whatever else.
Ninja edit: am I missing something?
ya the lease agreement
Saved 10 month of obligations
I resided there for four years and consistently paid on time, but by the fifth year, I simply couldn't meet all the financial obligations. I sincerely wish the Justice system would show more leniency instead of demanding that I repay the entire lease upon eviction.
Reneging on a written contract doesn't seem to have the same social stigma in America.
Wait, what? There's prestige in that?
Hating Musk doesn't change this.
I suspect if that we were in a pre-covid real estate market these evictions would have gone way faster. As it is, it's not like the landlord has potential customers waiting in the wings, so treating this as what it is (ie a price negotiation) seems like a value-optimizing strategy.
When you have enough money, they do. There are two completely separate justice systems in this world.
If it takes more money than rent, why do it. If it takes less money than rent, then everyone could not pay rent then have access to the money to access the separate justice system.
Today you can see an equally clear cut example in e.g. Seattle’s attempt at re-criminalizing drug consumption. It is only public use which is being recriminalized, meaning this is basically just legislation against the homeless, The housed have a safe space where they can safely use and not be arrested.
Relating to OP, the two justice systems is simply how differently failure to meet financial obligation is prosecuted between the two classes. If a working person owed this much in rent, they would be forced into bankruptcy, or worse. Wage theft is allowed to fester unhindered without consequences. A working person who commits financial fraud and steals only a fraction of what their bosses have stolen from them, is usually met with a SWAT raid.
If a large wealthy person stops paying for rent, the landlord might worry about a long and expensive legal and settle for a lot less than was owed.
The layperson is less likely to have the capital to prolong a legal battle and so is more likely to get stuck with the bill.
There are other economies of scale. If I stop paying for Google cloud my account quickly gets deactivated, but when Twitter stops paying they don't shut off service right away, they try to keep the client around and might offer discounts. If payment continues to be denied they may eventually shut off the service and settle for a portion of the cost of services extended during that time as above.
Wealthy people are given a ton of leeway until all the leeway immediately stops. You’ll see this throughout history. Elizabeth Holmes, etc.
A point made elsewhere, wealthy landlords have zero sympathy for those that cannot pay their bills. Their mightier than thou attitude that they didn’t get where they are in life by giving anything away for free or themselves getting any free lunches, so why should they cut anyone slack if they don’t pay their bills. However, they’ll be the first to not pay their bills if if the going gets tough because they have the knowledge of how the systems works.
Donald Trump has entered the chat.
But it's really quite simple:
Twitter had a spending problem. The history of that is actually not all that relevant. The ugly handover did not help of course and that caused a dip in advertising that combined with macro economic circumstances is just causing a massive cash flow problem. Like it or not, that problem added up to negative a few billion per year. Apparently things have recovered somewhat since Elon Musk started 'fixing' things but it's still not a great situation.
The bottom line is that an expensive office in Boulder Colorado is probably pretty high on the list of things to immediately cut. No matter how you look at what happened in Twitter, paying lots of cash for office space you don't need is not a great thing.
Office leases normally run for several years. So, a simple way to force the issue is to freeze the payments. You'll get evicted and sued, naturally. But what does this really mean in a situation where you just downsized staff by two thirds and they were reluctant to come back to the office anyway after Covid? Just making the point that the value of that office for Twitter was probably very low.
Not nice to do business like that, of course. But it is what it is and being nice is not the main job right now. Fixing the cash flow issues is. Paying for a mostly empty office in Colorado just isn't a high priority.
I don't actually see this having an unhappy end for Twitter. There will be some kind of settlement at some point and that will be it. The real estate market is imploding everywhere. So, the building owners might cut their losses at some point depending on how deep their pockets are and how big their stamina for pursuing this in the courts is. I have actually no idea how the real estate market in Colorado is but I imagine that won't be the only empty office in the area. Or judging from recent other articles on HN, everywhere else. Real estate is not a great business to be in right now.
There's more than a bit of a bubble there. Get a big fancy office, put a lot of overpaid staff in it, ????, profit. That ship has sailed. Twitter fired two thirds of their people and they are still there and they need a lot less office space now. Was that ugly: yes. How could it not be. But it happened and the situation needs fixing.
These are not the only creditors of course and I'm sure most are counting their cards right now and are going to be a lot more open to settling sooner rather than later. Not a bad outcome for Twitter if that works.
I was an avid Twitter user, but stopped using it because I find Musk super annoying and unethical. This is part of that. Complete and total brand destruction. That's not "delivering shareholder value". There's been massive markdowns to Twitter's valuation since Musk took over.
That valuation was itself at the height of the COVID stock bubble.
Commercial Real Estate in many cities is in a death spiral
I don't know who owns the real estate, but it's not a difficult win. The terms of the lease is clear, and Twitter has the money to pay.