Five New York City employee retirement groups that own shares of struggling video game maker Activision Blizzard are suing Activision, claiming the company has failed to turn over financial records as the groups try to investigate whether Activision got a fair price in its planned sale to Microsoft.
The lawsuit, filed in Delaware state court, says the New York groups are asking whether Activision did its shareholders a disservice by agreeing to sell the company to Microsoft for about $70 billion, or about $95 dollars per share, which pension groups say is undervalued. But they can’t dig into the company records they want to examine, according to the lawsuit, because Activision has refused to turn them all over.
The groups are “seeking access to certain books and records to investigate the independence and disinterestedness of the board of directors,” the lawsuit states, 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.
Pension funds are questioning whether Bobby Kotick, Activision’s chief executive, brokered a quick, underpriced deal with Microsoft late last year with little oversight from the board. to avoid any personal consequences he and his company may face for his handling of sexual misconduct. complaints against management.
“Kotick was aware of numerous credible allegations of misconduct by senior company officials, but did nothing to address them or prevent further violations,” the lawsuit states. “Kotick therefore faced a high likelihood of liability for breach of fiduciary duty, along with other board members.”
An Activision spokesperson said the company disagrees “with the allegations made in this complaint and looks forward to presenting our case in court.”
The New York lawsuit joins a litany of lawsuits 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 senior managers were kicked out, although Mr. Kotick remained.