In one of her first actions as the newly-appointed C.E.O. of Twitter, Linda Yaccarino paid off an overdue bill. Thanks to some potentially crazy logic of her boss, Elon Musk, Twitter had not paid some of the $300 million that it owes annually to Google for cloud computing services. Yaccarino, a longtime advertising executive with strong relationships across the industry, did what she had to do and mended fences with Google and its parent company, Alphabet. That was a smart, albeit necessary, move. With a market value of $1.5 trillion, Alphabet has infinitely more resources to fight over unpaid bills than even Musk, the world’s richest person, with a net worth these days of around $225 billion.
But Yaccarino has a lot more work to do on the bill-paying front. After all, in his brief and chaotic stint running his new media enterprise, Musk has apparently chosen not to pay lots of big Twitter bills. As a result, the company currently risks facing an involuntary bankruptcy filing. As I noted earlier this month, the rules for this procedure are very straightforward: A company with more than 12 creditors can be vulnerable when any three of them who have not been paid what they are legitimately owed get together and file an involuntary bankruptcy of the company in court.
It’s hard to fathom many smaller creditors trying to engage in full-scale litigation with one of the world’s wealthiest men, but Elon’s Twitter appears to be countenancing such a potential risk, almost even egging it on. Insider reported last week that Twitter has not paid Oracle “in months,” even though its co-founder and executive chairman Larry Ellison, the world’s fourth richest man with a net worth of $132 billion, invested $1 billion in Elon’s Twitter buyout, making him the third largest investor in the deal after Elon and the Saudi billionaire, Alwaleed Bin Talal (net worth $15 billion).