Activision Blizzard sued for documentation by New York City

Shareholder groups are demanding records of the company's deal with Microsoft in an effort to gauge the fairness of the valuation.

New York City officials have filed a complaint against Activision Blizzard, alleging that company CEO Bobby Kotick rushed to close a deal with Microsoft in order to escape liability for misconduct. According to a report from Axios, the action comes from the New York City Employees’ Retirement System and pension funds for teachers, police, and firefighters in the city. 

These groups, according to Axios, hold shares in Activision Blizzard. As such, the complaint is concerned with potential lost value caused by Kotick by failing to address misconduct allegations at the company ahead of its acquisition by Microsoft. The plaintiffs in the case are requesting documentation that disclose five other potential buyers. Additionally, the city of New York has been pressing Activision to reveal how much Kotick new about the alleged sexual misconduct at the company.

For business attorney Richard Hoeg of Hoeg Law in Michigan, it’s important to note that the new filing isn’t a formal lawsuit, but a way for shareholders to request records from Activision. Further, the request isn’t coming from the city of New York itself, but from pension funds with an apparent interest in the company performing well financially.

“Much of the ‘color’ added to the complaint regarding the low value of the company or the negotiation strategy is significantly harmed by the shareholder approval coming in at a 98% clip,” Hoeg told GameDaily. “In other words, it’s hard to argue fundamental unfairness when virtually every other similarly situated party ‘blessed’ the deal.”

On Twitter, Hoeg called the filing largely insubstantial in the face of the company’s other legal issues, such as the ongoing suit from California’s DFEH and a new NLRB complaint, among others. It’s hard to argue with Hoeg’s view here, especially as the company has urged its shareholders to vote against having to file an annual harassment report; the shareholders are primarily concerned with company value rather than any ethical concerns.

Regardless of the filing’s import, Activision Blizzard has been facing a growing number of investigations and lawsuits over the last couple years. These include a suit from the EEOC that has since been settled--though this settlement is being appealed--a handful of shareholder lawsuits, an SEC investigation, and several suits concerning the company’s acquisition by Microsoft.

Whatever comes of the new filing in New York, there’s no denying that Kotick and Activision Blizzard are in the hot seat.

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Editor-in-Chief

Sam, the Editor-in-Chief of GameDaily.biz, is a former freelance game reporter. He's been seen at IGN, PCGamesN, PCGamer, Unwinnable, and many more. When not writing about games, he is most likely taking care of his two dogs or pretending to know a lot about artisan coffee. Get in touch with Sam by emailing him at  sdesatoff@rektglobal.com or follow him on Twitter.