Five New York City employee pension groups that own stock in Activision Blizzard, including New York City Employees’ Retirement System (NYCERS), have sued the company in order to investigate whether it wrongly undervalued itself in its sale to Microsoft.
Activision Blizzard has faced numerous lawsuits and investigations in the past year, including an EEOC suit based on claims of sexual harassment and discrimination and other shareholder lawsuits. The SEC also launched its own investigation. A wrongful death lawsuit related to the alleged sexual harassment of a company employee was filed in March. The company settled the EEOC suit in late September for $18 million.
The New York lawsuit, filed on April 26 in Delaware’s Court of Chancery, proposes that documents related to the Microsoft deal, other possible buyers, memos, and more may suggest that Activision CEO Bobby Kotick and other board members undervalued the company when they accepted Microsoft’s offer for $68.7 billion and rushed into such a deal to protect themselves against any consequences of the sexual harassment and discrimination allegations.
According to the lawsuit, “Kotick was aware of numerous credible allegations of misconduct by the company’s senior executives — but did nothing to address them or prevent further offenses.” The lawsuit concludes, “Kotick therefore faced a strong likelihood of liability for breaches of fiduciary duty, together with other members of the board.”
If successful, the suit could change or even terminate the Microsoft deal.
Additional Reading
New York City sues Activision, targeting CEO Bobby Kotick, Axios (May 4, 2022)
New York City pension funds sue Activision over financial records., The New York Times (May 4, 2022)
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