New York City pension funds sue Activision Blizzard, seeking records on CEO Bobby Kotick - New Style Motorsport

The suit from the Employees Retirement System of the City of New York, along with pension funds representing the city’s teachers, police and firefighters, seeks to open Activision Blizzard’s books to prove whether Kotick negotiated the selling the company for $68.7 billion to Microsoft as “a means of escaping responsibility” stemming from allegations that it turned a blind eye to years of claims of staff harassment within the company. The funds are investors in Activision Blizzard and claim that misconduct by Kotick and the company’s board of directors has undermined shareholder value.

On Wednesday, Activision Blizzard told CNN in a statement: “We disagree with the allegations made in this complaint and look forward to presenting our arguments in court.”

CNN obtained a public version of the complaint dated May 2 from the New York City Comptroller’s Office. The original lawsuit, filed in Delaware Chancery Court, was dated April 26. When asked for comment, the New York City Comptroller’s office referred CNN to the New York City Law 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 Microsoft settlement, the suit alleged, “Kotick will be able to escape responsibility and accountability entirely and instead continue to serve as an executive after the Merger closes. Worse yet, despite his potential liability.” for breaches of fiduciary duty, the Board allowed Kotick himself to negotiate the transaction with Microsoft The Board’s decision to entrust Kotick with the negotiation process is inexcusable for the additional reason that Kotick may personally receive substantial material benefits the value of which is not directly aligned with the price of the Merger”.

Kotick will receive a $22 million bonus for meeting workplace culture goals that “almost identically track” 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 is facing a series of federal investigations and investor lawsuits linked to allegations of workplace misconduct.

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

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