Twitter sued for breach of contract & refusal to pay $8 million to a key software vendor

After learning last week that Twitter has stopped paying its vendors and has stopped paying the rent of most of its offices, including the Twitter HQ building in San Francisco, we now have learnt that they now being sued by one of the company’s largest software vendors.

Ever since Musk took control of Twitter, he has asked the finance teams and all other departments that are responsible for clearing payments, to stop paying vendors, and stop paying rent.

A lawsuit was recently filed against Twitter by Imply Data, Inc, alleging that they failed to pay a $1,092,000 invoice in a software contract that doesn’t expire until late 2024. And by the time the contract ends, Twitter would have another $7 million outstanding. The lawsuit was filed in the California Superior Court in San Francisco County and alleges a breach of contract.

Imply makes a database based on Apache Druid open source software as well as products for managing and monitoring Druid clusters, which Twitter uses for their internal analytics especially when it comes to streaming and videos. 

“For over four years, Imply has licensed its proprietary software to Twitter, and Twitter has paid Imply over $10 million,” the lawsuit said. “Twitter has always been very pleased with Imply’s product and its related maintenance and support services, so, in mid-2021, the parties extended the term of their software license and service agreement for an additional three years from October 1, 2021, through September 30, 2024.”

When Musk initiated the conversation of buying Twitter back in May this year, Twitter informed Imply, that it would not renew the contract again, but would continue to use their services and pay them for it, until end of the contract on September 30, 2024.

Shortly after Musk’s purchase of Twitter was completed, Twitter refused to pay the outstanding quarterly invoice, which was due on November 30, 2022, and Twitter disclaimed any obligation to pay any future invoices from Imply.

Imply is seeking financial damages for breach of contract. “Imply anticipates that Twitter’s breach will continue, with the amount in default increasing each quarter until the end of the License Agreement’s term. Twitter’s breach has damaged and will damage Imply in an amount that will be proven at trial, but which will likely be in excess of $8 million,” the company alleged in their lawsuit.