New York City pension funds sue Activision over financial records.
Five New York City employee pension groups that own stock in Activision Blizzard, the embattled video game maker, are suing Activision, saying that the company failed to turn over financial records as the groups try to investigate whether Activision secured a fair price in its planned sale to Microsoft.
The lawsuit, filed in Delaware state court, says that the New York groups are asking whether Activision did a disservice to its shareholders by agreeing to sell the company to Microsoft for about $70 billion, or about $95 per share, which the pension groups say is undervalued. But they cannot dig into the corporate records that they want to review, the lawsuit says, because Activision has refused to turn them all over.
The groups “seek access to certain books and records to investigate the independence and disinterestedness of the board,” the lawsuit says, referring to Activision’s board of directors.
The complaint comes from groups including the New York City Fire Department Pension Fund and the Teachers’ Retirement System for the City of New York, and was dated April 26. It was reported earlier on Wednesday by Axios.
The pension funds are questioning whether Bobby Kotick, Activision’s chief executive, negotiated a quick and undervalued deal with Microsoft late last year, with little supervision from the board, to avoid any personal consequences that he and his company could face for its treatment of sexual misconduct complaints against executives.
“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 said. “Kotick therefore faced a strong likelihood of liability for breaches of fiduciary duty, together with other members of the board.”
An Activision spokesman said that the company disagreed “with the allegations made in this complaint and look forward to presenting our arguments to the court.”
The New York lawsuit joins a litany of legal action against Activision, which makes popular games like Call of Duty and Overwatch. Last summer, a California employment agency sued Activision, accusing it of fostering a toxic and sexist work environment in which women were routinely harassed. In response, employees protested and top executives were forced out, though Mr. Kotick stayed.