New York City just lodged a new lawsuit against Activision-Blizzard

    
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A new lawsuit filed in Delaware by multiple New York City retirement and pension funds alleges in court something that’s seemed like an open secret for months: that Activision-Blizzard CEO Bobby Kotick hastily arranged a lowball deal to merge into Microsoft in order to dodge liability for the ongoing lawsuits and dumpster fires still raging at the company.

As first reported by Axios, the complaint demands access to relevant documents and full transparency on the Microsoft deal in an attempt to prove that Kotick’s hasty effort to sell Activision-Blizzard was a “means to escape liability for [the directors’] egregious breaches of fiduciary duty” in regard to the sexual harassment and discrimination scandal and “offered Kotick the chance to realize substantial nonratable benefits,” the result of which has allegedly cost the company – and its investors – stock value.

“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.”

Just as a side note here, Axios lists out the lawsuits and complaints to date, which is more than I think we’ve covered to date – and we’ve covered a lot. There’s the discrimination suit from the California DFEH, the federal harassment suit with the EEOC, a class action suit, four shareholder lawsuits merged into two, four remaining lawsuits over the Microsoft merger (apparently four already dismissed), one other complaint like this one, and additional investigations from the SEC and DOJ. It’s getting hard to keep track of, frankly.

Source: Complaint via Axios. Cheers, Danny.
Activision-Blizzard is considered a controversial gaming company owing to a long string of scandals over the last few years, including the Blitzchung boycott, mass layoffs, labor disputes, and executive pay fiasco. In 2021, the company was sued by California for fostering a work environment rife with sexual harassment and discrimination, the disastrous corporate response to which compounded Blizzard’s ongoing pipeline issues and the widespread perception that its online games are in decline. Multiple state and federal agencies are investigating the company as employees strike and call for Bobby Kotick’s resignation. As of 2022, the company is being acquired by no less than Microsoft.
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