New York City Files Lawsuit Against Activision Blizzard Seeking Access To Internal Documents
Activision Blizzard has been hit with another lawsuit with the Microsoft merger looming on the horizon. The New York City Employees’ Retirement System and pension funds filed the lawsuit (technically a 220 complaint) in Delaware last week to gain access to the company’s books and internal documents as one of ABK’s shareholders, as news site Axios reports.
The city claims that CEO Bobby Kotick rushed the undervalued deal to escape liability for the sexual harassment and other misconduct complaints that happened on his watch. By getting access to the company’s books, they hope to gain information and leverage to sue Kotick and its board of directors for allegedly devaluing the company’s stock value through their actions, or more appropriately, their inactions.
“Given Kotick’s personal responsibility and liability for Activision’s broken workplace, it should have been clear to the Board that he was unfit to negotiate a sale of the Company,” read the lawsuit. “But it wasn’t.
“With the announced Merger, Kotick will be able to escape liability and accountability entirely, and will instead continue to serve as an executive after the Merger closes. Worse, despite his potential liability for breaches of fiduciary duty, the Board allowed Kotick himself to negotiate the transaction with Microsoft. The Board’s decision to entrust Kotick with the negotiation process is inexcusable for the additional reason that Kotick stands to personally receive substantial material benefits whose value is not directly aligned with the Merger price.
Given the Board’s own potential liability and its decision to entrust negotiations to Kotick, it is unsurprising that Activision appears to have received no value at all for the derivative claims Activision could have asserted against its leadership. Separate and apart from the fairness of the Merger price and process, the Board’s failure to realize — or even try to realize — value for these derivative claims constitutes its own breach of fiduciary duty.”
New York City’s lawsuit is the latest in a long list of lawsuits and complaints that have been filed against Activision Blizzard in the past six months. The company is currently the target of seven ongoing lawsuits (including the DFEH’s), one possible class action suit, and two 220 complaints, plus an SEC investigation and insider trading inquiries from the Department of Justice and SEC.
