The newest lawsuit in the Activision Blizzard litigation saga alleges the company withheld critical information from shareholders to promote the Microsoft acquisition of the publisher.
Shareholder Kyle Watson moved forward with the lawsuit in California state yesterday and outlined how the $68.7 billion dollar sale of the juggernaut publisher to Microsoft grants the board of directors immediate benefits, Polygon reports.
The lawsuit alleges the proposal of the Activision Blizzard sale only shared the immediate benefits with each shareholder that holds stock in the company. “If the merger is completed, you will be entitled to receive $95.00 in cash, without interest, for each share of our common stock” the Securities and Exchange Commission proposal outlines.
There are some damning allegations detailed in the lawsuit including “the Activision Board failed to create an independent committee composed of disinterested directors to run the sales process” which accuses the current Activision board of possible conflict of interest, in a “flawed sale process.” It gets messier with “The Board and Company’s executive officers are conflicted because they will have secured unique benefits for themselves from the Proposed Transaction not available to Plaintiff as a public stockholder of Activision.”
Then details are shared by how much capital each Activision Blizzard executive is set to make in “golden parachute” type severance packages if their employment is terminated under ‘certain circumstances.’
Plaintiff Kyle Watson wants Activision Blizzard to release a new SEC preliminary proxy statement that includes more facts, the outlining of this conflict of interest, and no misleading verbiage. If the transaction between Activision and Microsoft is allowed to proceed, Watson wants damages. The transaction is currently under review by the Federal Trade Commission.
This new lawsuit comes on the tail end of other massive litigation that has been made against Activision, claims of union-busting, and the huge sexual harassment allegations still haven’t reached a conclusion thus far.