Lawsuit: Twitter failed to pay $136,000 in rent at San Francisco office tower

Musk-led Twitter faces at least three lawsuits alleging it failed to pay bills.

The Elon Musk-owned Twitter is facing another lawsuit alleging that it failed to pay its bills.

The plaintiff in the latest case is Columbia REIT-650 California, LLC, the landlord of the 650 California Street office tower in San Francisco. Exhibit A in the lawsuit is a lease between Columbia REIT and CrossInstall, a mobile ad company purchased by Twitter in May 2020. All of CrossInstall's 70 employees joined Twitter at the time.

The lease was made in September 2017 for a period of seven years and covered 15,500 square feet, the entire 30th floor of the building. The annual rent started at $1.29 million, and the lease had automatic increases throughout the seven-year term.

The breach-of-contract lawsuit says Columbia REIT served a notice of default to Twitter on December 16, 2022, "stating the amount of Rent due in the estimated sum of $136,260.00 and notifying Tenant that it was in default of the Lease if it failed to pay that sum within five (5) business days after service of the Default Notice."

The lawsuit says Twitter failed to comply by the required date and asks the court for damages of at least $136,260. The lawsuit was filed in California Superior Court in San Francisco County on December 29, 2022. We contacted Twitter about the lawsuit today and will update this article if we get a response, but the company reportedly eliminated its communications department after Musk took over.

Two other lawsuits allege nonpayment

Columbia REIT's lawsuit against Twitter was filed just 16 days after software vendor Imply Data sued Twitter for an alleged breach of contract in the same court. Imply Data's lawsuit said Twitter failed to pay a $1,092,000 invoice in a software contract that doesn't expire until late 2024 and that Twitter apparently intends to stiff the vendor on another $7 million worth of payments.

Additionally, a private jet provider sued Twitter in US District Court in New Hampshire on December 9, alleging it refused to pay $197,725 for "private air charter passenger transportation services" provided to Twitter Chief Marketing Officer Leslie Berland on October 26 and 27, 2022. Musk completed his Twitter acquisition on October 27, and Berland was among the many executives who left shortly after.

Before the lawsuits, a New York Times report on November 22 said Twitter began stiffing some vendors after Musk took over. The report said Twitter "executives had racked up hundreds of thousands of dollars in travel invoices that the social media service planned to pay" but that Musk "refused to reimburse travel vendors for those bills." Musk "issued an order to slow or in some cases halt transfers of funds to Twitter’s vendors and contract services" and "declined to pay for the travel services incurred by the former Twitter executives," the NYT report said.

Another NYT report on December 13 said Twitter had stopped paying rent at multiple offices. "To cut costs, Twitter has not paid rent for its San Francisco headquarters or any of its global offices for weeks, three people close to the company said," according to the article.

Twitter sublease included in exhibits

CrossInstall, the original party in the lease with Columbia REIT, was dissolved well before Musk bought Twitter. Twitter renamed CrossInstall to MoPub Acquire after the 2020 purchase and said it "completed the wind down of MoPub Acquire (formerly known as CrossInstall)" in December 2021. Twitter also sold MoPub, a different ad company it bought in 2013, to AppLovin in January 2022.

But with Twitter still on the hook for the lease at 650 California Street, it signed a sublease with Dentsu International Americas on October 5, 2022, a few weeks before Musk completed his acquisition of Twitter. Dentsu is not a party in the breach-of-contract case, but the sublease is one of the exhibits submitted by Columbia REIT.

The sublease, which runs through January 31, 2025, describes Twitter as the sublandlord and successor in interest to CrossInstall. It shows that Dentsu's monthly payments to Twitter start at $91,980 a month, covering most but not all of what Twitter allegedly owes Columbia REIT.

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