Activision Blizzard is sued again – but by the New York pension fund this time

Another day, another Activision Blizzard lawsuit. But this time, the prosecuting party is not who one would expect given the circumstances.

CNN reports that the embattled developer/publisher has been sued by the New York City Pension Fund, with the lawsuit actively targeting CEO Bobby Kotick. According to fund officials, they are trying to force ActiBlizz to reveal documents that could indicate whether Kotick “breached its fiduciary duty to investors.”

(Photo: Scott Olson/Getty Images)
SUN VALLEY, ID – JULY 07: Activision Blizzard Inc. CEO Bobby Kotick attends the Allen & Company Sun Valley Conference on July 7, 2015 in Sun Valley, Idaho.

In non-legal terms, the lawsuit seeks to prove whether the CEO brokered the deal with Microsoft in order to escape liability for his alleged actions at the company. It’s been news for some time now that Activision Blizzard has been sued by the state of California over allegations of workplace and sexual harassment, which Kotick reportedly turned a blind eye to.

Here is what the complaint says:

“Through the agreement with Microsoft, Kotick will be able to escape liability 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 authorized Kotick itself 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 is likely to personally receive substantial material benefits the value of which is not is not directly aligned with the merger price.

According to Axios, the lawsuit was filed in Delaware on April 26. It involved the New York City Employees’ Retirement System and Pension Funds, which cover the city’s firefighters, teachers and police. They filed it since they own Activision Blizzard stock, believing the actions of Kotick and senior management are fundamentally hurting the value of the company.

In other words, these New York investors are going to lose a staggering amount of money.

Also Read: Microsoft Got Investor Approval Votes to Acquire Activision Blizzard-When Does It Close?

More details on Activision Blizzard’s new lawsuit

Here are some interesting facts about this new Activision Blizzard lawsuit.

The prosecutors argue that Kotick’s apparent direct connection to the company’s “broken” workplace should have been enough to keep him out of the deal with Microsoft. On top of that, they also say that Microsoft heavily undervalued the deal with its $95 per share bid. It was revealed that ActiBlizz shares were trading near this amount shortly before the start of public offerings last year.

ActivisionBlizzard
(Photo: GettyImages/ Photo by DAVID MCNEW)
ActivisionBlizzard

Not to mention, there’s still the issue of Kotick’s expected payout. According to Fortune, the controversial CEO could expect a windfall of $375.3 million before taxes once the deal with Microsoft closes. There’s also an additional $22 million in bonuses to “achieve workplace culture goals,” according to the original CNN report.

All of these details relate to the new trial. Now it seems that even though Kotick and the antics of the board may have devalued the company, the CEO still has the final say with a massive payout. What’s more, he can still keep his job until the Microsoft deal closes, which isn’t expected to materialize until next year.

It’s also the latest installment in the saga of Kotick, who in early April was challenged by four US senators for his lack of accountability over workplace toxicity claims.

Related Article: Microsoft Won’t Block A Future Activision Blizzard Union

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Written by RJ Pierce

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Dolores W. Simon