New York City is leveling a lawsuit at Activision Blizzard CEO Bobby Kotick, which accuses him of securing the takeover bid from Microsoft so he could escape liability for allegations of rampant harassment and misconduct at Activision Blizzard. The New York City Employees’ Retirement System, New York City Fire Department Pension Fund, New York City Police Pension Fund, New York City Board of Education Retirement System, and Teachers’ Retirement System for the City of New York all invested in Activision Blizzard, and they allege in the suit that Kotick’s mismanagement hurt the company’s stock value.
New York City officials demand Activision Blizzard turn over internal documents in lawsuit
The big what-if with this lawsuit against Activision Blizzard Inc. is whether or not allegations of misconduct influenced Kotick’s decision to accept Microsoft’s takeover bid. Axios reports the suit is a “220 complaint” filed in Delaware’s Court of Chancery, which requests Activision Blizzard to produce the following material:
- Material related to the Microsoft deal.
- Info on other potential buyers
- Internal documents indicating how much Kotick knew about the misconduct in the company.
The suit alleges that the fact that Kotick was under fire for the multitude of issues exposed throughout Activision Blizzard should have shown the board that he was unfit to negotiate a sale of the company. It goes on to state that Kotick and the directors of the board are using the takeover as a way to escape liability for “egregious breaches of fiduciary duty.” The plaintiffs believe that Microsoft’s $95/share payout undervalues Activision Blizzard, which was trading at near that level in early 2021 before the scandals surrounding the company broke.
Activision Blizzard is currently trading at $78.99, down from a high of $103.81 on February 13, 2021.