New York City Files Complaint Against Activision Blizzard for Wrongdoing Tied to Microsoft Acquisition

ign.com:

Multiple New York City funds have banded together to file a complaint against Activision Blizzard, alleging that CEO Bobby Kotick and the board may have breached their fiduciary duty in their dealings with Microsoft to be acquired, and harmed the company's value.

As reported by Axios, the suit was filed on May 2 by the New York City Employees', Board of Education, and Teachers' retirement systems, as well as pension funds for the city fire department, and police — all of which hold stock in Activision Blizzard. The plaintiffs are claiming their right to inspect various Activision Blizzard records to determine if any wrongdoing was done through the acquisition process, citing a number of concerns to back their demand.

Per the suit, the same plaintiffs had originally requested to inspect the company's books in October of last year following the numerous reports of an unsafe working environment for minority and women employees at the company as well as CEO Bobby Kotick's apparent knowledge and dismissal of said environment. Activision complied with some of their requests, but not all.

While all this was going on, Activision announced its pending acquisition by Microsoft, but this only furthered concerns. Plaintiffs point out that if the merger goes through, it will "have the effect of extinguishing these highly valuable derivative claims against Activision's Board" as well as Kotick, who will be "able to escape liability and accountability entirely."

Further, they note that Kotick was allowed by the board to negotiate the deal with Microsoft "despite his potential liability for breaches of fiduciary duty," and despite the fact that he stands to benefit substantially from the merger aside from the direct benefits from the