Following the news that Microsoft is buying Activision Blizzard in an unprecedented $70 billion dollar deal, a new lawsuit has been filed against the Call of Duty publisher. Filed by the New York City Employees Retirement System on April 26, the lawsuit claims CEO Bobby Kotick’s rush to sell Activision following allegations of workplace misconduct has negatively impacted the value of the company and has ultimately devalued the shares it owns.
According to Axios, the lawsuit alleges that Kotick “was not in a position to negotiate the sale of the company” given his “personal responsibility for Activision’s broken workplace.” New York claims that the deal not only hurt their financial holdings, but also served as a way for Kotick and other Activision directors to “avoid liability for their egregious breaches of fiduciary duty.”
Thanks to an action allowed by the Delaware Court of Chancery, New York City can pressure Activision to “open its books and expose potential wrongdoing.” New York City is requiring Activision to provide numerous documents related to the Microsoft deal, as well as information about other potential buyers, descriptions of sales talks, board memos and more. When GameSpot reached out to Activision Blizzard for comment on the lawsuit, a representative said, “We disagree with the allegations made in this lawsuit and look forward to presenting our arguments in court.”
This is not the first time the city has pressured Activision for internal documents. According to the report, New York City has been requesting reports about Activision’s toxic workplace since last fall in an attempt to find out what Kotick knew about sexual misconduct at the company. This is also not the first lawsuit Activision has faced alleging gross mismanagement of operations. Since last summer, the company has faced a federal harassment lawsuit, a discrimination lawsuit, a class action lawsuit, four shareholder lawsuits, an SEC investigation and more. In addition, Kotick himself has been accused of knowingly covering up cases of sexual harassment and threatening to kill an employee.
So far, Microsoft’s deal to buy Activision Blizzard has not been fully approved. The purchase must face regulatory scrutiny, experts say, though it is ultimately expected to be approved. If that happens, Microsoft will own Activision Blizzard and all of its studios and franchises, including Call of Duty, Overwatch, Warcraft, Diablo, and more.
In other Activision Blizzard news, the company recently released its quarterly financial report to reveal a sharp decline in Call of Duty revenue, player count, and unit sales. For the quarter ending March 31, Activision Blizzard generated revenue of $1.77 billion, a far cry from last year’s $2.28 billion for the same period. However, it is worth noting that spending on video games during the quarter was down in the US overall.