New York City sues Activision Blizzard, says Bobby Kotick is 'unfit' to negotiate the Microsoft buyout

pcgamer.com:

Activision Blizzard is facing yet another lawsuit, this one filed by the New York City Employees' Retirement System and pension funds representing the city's fire department, police, and teachers. The suit, available via Axios, claims that CEO Bobby Kotick was «unfit to negotiate a sale of the company» to Microsoft, and made the deal in part to «escape liability» for his role in enabling workplace misconduct and abuse.

The plaintiffs say the lawsuit arises from an October 2021 demand to inspect Activision Blizzard's books and records as part of an investigation into its board of directors, specifically its «failure to maintain a safe and non-discriminatory working environment for its (specifically minority and female) employees, and failure to take action in response to repeated, grave allegations of misconduct, discrimination, and harassment by Activision’s senior executives.»

Activision partially complied, according to the complaint, but then on January 18—while the inspection was ongoing—the company announced the acquisition deal with Microsoft. The plaintiffs say that agreement undervalues Activision Blizzard—not only on the basis of the share price premium, which the suit describes as «a paltry 1.16%,»  but also because it also does not account for the value of «derivative claims» the plaintiffs were developing separately against Activision Blizzard. Those claims will go away if and when Activision Blizzard becomes a Microsoft subsidiary.

The deal happened so quickly and at such a discount, the plaintiffs allege, because members of Activision Blizzard's board of directors, and Kotick in particular, «faced a strong likelihood of liability for breaches of fiduciary duty» for failing to address the allegations of