Elon Musk’s office-space squatting strategy is making waves of litigation on the other side of the pond too, as the real estate manager for the Royal Family’s Crown Estate is also hauling Musk to court over refusal to pay rent at Twitter’s London office.
We informed you late Monday afternoon that Elon Musk’s Twitter is now being sued by a Shorenstein affiliate over $6.8 million in unpaid back rent at the company’s Market and Tenth Street headquarters. But that’s not the only landlord suing Twitter for not paying its bills since Musk took over, as other lawsuits have been filed for unpaid rent including Twitter’s 30th floor of 650 California office, and their Seattle office landlord suing Twitter over two months unpaid rent.
But now we learn of a new lawsuit that may be a royal pain for Musk. The AP reports that the British monarchy’s real estate portfolio manager the Crown Estate is also suing Twitter over back rent, or in the AP’s words, has “started court proceedings against Twitter after the company fell behind on rent at its offices near London’s famed Piccadilly Circus."
Who had King Charles sues Elon Musk over unpaid rent on their bingo card? https://t.co/A1qeRIdgeY— Bill Prady ⚛️ (@billprady) January 24, 2023
The AP describes this as “the latest sign that owner Elon Musk’s extreme cost-cutting strategy includes simply not paying the bills.” But it's not just a sign, since there has been plenty of coverage to date that Musk has allegedly been directing employees to not pay bills. And come on, business media, refusing to pay one’s bills should not be described as a “cost-cutting strategy,” though perhaps this is a strategy for immediately re-negotiating one's rent.
Twitter sued by landlord at SF HQ after alleged nonpayment of $6.8 million in rent: https://t.co/i823gBIf6R The company was also sued by the Crown Estate, which manages properties for King Charles III, for alleged unpaid rent in a London office. pic.twitter.com/bQOUpy20mc— Roland Li (@rolandlisf) January 24, 2023
As the San Francisco Business Times explains, the Crown Estate is a real estate entity that "manages the property portfolio owned by King Charles III." The AP adds that the Crown Estate "owns some of the priciest real estate in central London, and "is a vast property portfolio that includes much of London’s Regent Street as well as the Windsor estate."
Being the British Royals, they’re keeping a stiff and tight upper lip about these legal proceedings. Bloomberg tried to dig some details out of the lawsuit, and merely found that the Crown Estate had “filed a suit against Twitter over its London premises in the West End, according to court filings. No further detail was available, and a spokesperson for the Crown Estate declined to comment beyond confirming the suit.”
BREAKING: Elon Musk is being sued by the Crown Estate over unpaid rent at Twitter HQ in London. If only he'd stopped going to Starbucks and cancelled his Netflix subscription, none of this would be happening 😭😭😭— Laura Kuenssberg beyond parody (@LKTranslator) January 24, 2023
The BBC has some additional explanation that the suit was filed “in the High Court in London last week,” and that “The Crown Estate took legal action after previously contacting Twitter about rental arrears over office space at Air Street." And in a brief explainer of the Monarchy’s complicated finances, the BBC adds that “The [Crown] Estate is one of the UK's largest landowners and an independent commercial business, generating profit for the Treasury for public spending. The monarch is then given 15% of the annual surplus of the estate, known as the Sovereign Grant, to support official duties."
Musk has already reportedly told Twitter employees that bankruptcy remains a possibility, so these "cost-cutting" measures could portend worse days ahead for the company. Musk, as we know, paid $44 billion to take Twitter private, and took out a ton of debt to do so. Interest on that debt is already coming due; Bloomberg reports the company will be charged with a $300 million quarterly debt payment this month, so just doing some back-of-the-envelope calculations, that $300 million quarterly works out to $100 million per month, or about $3.2 million per day. And that’s not even the cost of any company operations, that’s just debt payments.