Per Axios, the city of New York is suing Activision CEO Bobby Kotick for his role in “securing a takeover bid from Microsoft in order to escape liability for misconduct at the company.”
The suit was filed on April 26 in Delaware by New York City Employees’ Retirement System supporting pensions for teachers, firefighters, and police. These groups own Activision stock and have sued Kotick believing the situation at Activision Blizzard has hurt the stock.
The creator of Call of Duty and Warcraft has had one of the worst years ever, facing a mountain of litigation including the California Department of Fair Employment and Housing. The latest lawsuit seeks to give stockholders to open their books and see what is happening behind the scenes.
As of this post, New York City is demanding a list of documents and any information pertaining to the sale of Activision to Microsoft. This includes the list of buyers, anything regarding sales talk, board memos, and more.
Since Fall 2021, New York City has been asking for documents, hoping to find out what Bobby Kotick knew regarding the allegations.
Looking at the complaint, New York wants access to Activision’s financial books as an excuse to sue Kotick and the board for lowering the company’s value.
“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. But it wasn’t,” alleges the lawsuit.
“Microsoft opened acquisition discussions on November 19, 2021, but the Board did not hold a meeting to discuss Microsoft’s outreach until two weeks later, on December 1, 2021,” the lawsuit continues.
“In that window, without Board authorization or an actual offer from Microsoft, Kotick blithely informed Microsoft that he would be willing to accept an offer in the range of $90-$105 per share.”
In January, Microsoft announced agreed to purchase Activision Blizzard for nearly $70 billion.
“The speed with which Kotick moved to not just set an offer ceiling, but to execute an agreement, was to be expected,” the lawsuit alleges. “Not only did the Merger offer Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty, but it also offered Kotick the chance to realize substantial non-rateable benefits.