New lawsuit alleges Activision CEO rushed through Microsoft acquisition to escape liability for wrongdoing

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New lawsuit alleges Activision CEO rushed through Microsoft acquisition to escape liability for wrongdoing

A new lawsuit filed by the New York City Employees Retirement System has alleged Activision Blizzard CEO Bobby Kotick accelerated a Microsoft takeover bid to avoid liability for actions reprehensible following a damning report by the Wall Street Journal claiming he had known about sexual misconduct at the Call of Duty publisher “for years.”

Activision Blizzard has faced a relentless stream of shocking allegations regarding its corporate culture since last July, when a California State Trial the filing called the publisher “a breeding ground for harassment and discrimination against women”. Based on this trial, the The Wall Street Journal published a report in November, claiming that Bobby Kotick had known about the allegations of sexual misconduct and abuse of female employees in many areas of the company “for years” but had not acted on them or told the board of directors. administration and leaders everything he knew.

It is these claims about Kotick’s behavior that form the backbone of a new trial filed by the New York City Employees Retirement System and Pension Funds, which owns Activision stock. The deposit (as spotted by Axios) seeks to obtain documents that Activision has so far refused to release so that the plaintiff can conduct an investigation into “the council’s failure to maintain a safe and non-discriminatory work environment for its employees (especially minorities and women), and the failure to take action in response to repeated serious allegations of misconduct, discrimination and harassment by senior Activision executives.”

The filing says it wants the documentation in order to investigate any wrongdoing by the publisher’s board and potentially file a derivative action on Activision’s behalf. Citing the Wall Street Journal report, among others, the lawsuit specifically points to Bobby Kotick’s reported knowledge of “numerous credible allegations of misconduct by the company’s senior executives” and his alleged failure to “address or prevent them.” new offences” as an example of such wrongdoing. , saying he believes Kotick faces “a strong likelihood of liability for breaches of fiduciary duty, along with other board members.”

Lawsuit appeals board’s decision to allow Kotick to trade Takeover of 69 BN by Microsoft of the publisher of Call of Duty – a process that would have started just days after the publication of the Wall Street Journal report – “inexcusable” given Kotick’s “potential liability for breaches of fiduciary duty”, and given that he “is likely to personally receive substantial material benefits the value of which is not directly aligned with the merger price.”

“The speed with which Kotick acted not just to set a bid cap, but to execute a deal, was predictable,” the filing said. “Not only did the merger offer Kotick and his fellow directors a means to escape liability for their gross breaches of fiduciary duty, it also offered Kotick the opportunity to realize substantial non-tariffable benefits.” Those perks would include $22 million for Kotick if it makes “appropriate progress” toward certain gender discrimination-related goals — goals the company is apparently already legally obligated to meet following an agreement with the Commission for the equal opportunities and employment.

The New York City Employees Retirement System filing, which further argues that Kotick’s acquisition deal “appears to seriously undervalue Activision because it represents only a 1% premium” over during the company’s action ahead of the California lawsuit last July, seeks to secure the right “to inspect certain books and records of the company” so that it can continue its investigation into alleged misconduct by the board of directors.

Despite a flurry of game announcements in recent weeks as it tries to put the last ten months of shocking allegations in its work culture behind it, Activision – which recently wrote to shareholders urging them to vote against a New York State proposal that it should publish an annual report detailing the effectiveness and results of its efforts to prevent abuse, harassment and discrimination in its workplace – continues to be mired in controversial.

In March it was sued for wrongful death by the parents of a former Activision Blizzard employee who killed himself during a company retirement in 2017, alleged to be the result of sexual harassment by co-workers. More recently, a U.S. district court judge mentioned they were “ready to approve” Activision Blizzard’s $18 million settlement of a separate sexual harassment lawsuit filed by the Equal Employment Opportunity Commission last year, despite objections from other parties, and events took another dramatic turn in April when the Governor of California was accused of interference to support Activision Blizzard in the state discrimination and harassment lawsuit that sparked the publisher’s woes.

Article source https://www.eurogamer.net/new-lawsuit-alleges-activision-ceo-rushed-through-microsoft-acquisition-to-escape-liability-for-wrongdoing

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