Elon Musk’s X Corp, facing its legal claims over unpaid rent, is suing a financial services company to recoup more than $713,500 in allegedly past due rent and other fees stemming from a sublease agreement for San Francisco office space. The lawsuit filed in a California court accuses Atlas Exploration of breaching its contract with the space-age startup.
The suit filed by X Corp in the northern district of California accuses Atlas of failing to pay more than $340,263 in rent for space that it occupied at 650 California Street in San Francisco’s Financial District between April and November 2021. It also says Atlas sought early termination of its sublease last year.
Atlas’s attorneys declined to comment. The dispute is one of many that X Corp has faced overpayment and other financial obligations since its billionaire owner bought Twitter for $44 billion in late 2022.
Since acquiring Twitter, Musk has conducted a sweeping cost-cutting campaign that slashed half the company’s 7,500-person workforce and fired or laid off thousands more. He has also renegotiated and canceled contracts with outside vendors to trim the company’s expenses.
Those efforts are taking their toll on Twitter’s bottom line. It has a $13 billion debt load and is losing money, prompting some advertisers to stop spending on the company. The company’s stock has also dropped sharply, putting its value at roughly one-third of what Musk paid for the social media giant.
The rash of legal battles has also been fueled by accusations that Musk and the company have not fulfilled their promises to shareholders about generating cash flow. Some of those investors have begun suing Musk and Twitter to recoup losses on their investments.
The dispute with Atlas is the latest in a series of court actions brought by landlords claiming X Corp, formerly Twitter, is behind on payments for office spaces in Silicon Valley and London. Earlier this year, Columbia Property Trust sued Twitter for more than $136,000 in late rent at its headquarters at 1355 Market Street in San Francisco. That suit was dismissed in April.