New York City Pension Funds Sue Activision Blizzard, Seeking Files on CEO Bobby Kotick

The complaint from the New York City Employees’ Retirement System, as well as pension funds representing the city’s teachers, police and firefighters, seeks to open the books of Activision Blizzard to prove whether Kotick negotiated the The company’s $68.7 billion sale to Microsoft as “a way to escape liability” stemming from allegations it turned a blind eye to years of staff harassment claims at the company. The funds are investors in Activision Blizzard and say misconduct by Kotick and the company’s board of directors reduced shareholder value.

On Wednesday, Activision Blizzard told CNN in a statement, “We disagree with the allegations made in this lawsuit and look forward to presenting our case to the Court.”

CNN obtained a public version of the May 2 complaint from the New York City Comptroller’s Office. The original complaint, filed in the Delaware Court of Chancery, was dated April 26. Asked for comment, the New York City Comptroller’s Office referred CNN to the New York City Legal Department, which is handling the litigation. The department did not immediately respond to a request for comment.

The complaint was first reported by Axios.

Thanks to the agreement with Microsoft, the complaint alleged that “Kotick will be able to escape all responsibility and liability entirely, and will instead continue to serve as an executive after the merger closes. Worse, despite its potential liability for breaches of fiduciary duty, the board of directors has authorized Kotick itself to negotiate the transaction with Microsoft. The decision of the Board to entrust Kotick with the negotiation process is inexcusable for the additional reason that Kotick is likely to personally receive benefits substantial materials whose value is not directly aligned with the price of the merger.

Kotick is set to receive a $22 million bonus for meeting workplace culture goals that “almost identically follow” the company’s settlement this year with the Equal Employment and Opportunity Commission, according to the complaint.

The lawsuit is the latest legal headache for Activision Blizzard, which faces a series of federal investigations and investor lawsuits related to allegations of workplace misconduct.

The complaint follows multiple requests for Activision Blizzard registrations by New York pension officials since October 2021, and it argues that the company has not been responsive enough. Among the documents now sought by officials are board presentations, meeting minutes, memos, and other documents related to the Microsoft deal and specifically related to Kotick’s role in the case.