Tech

A New York Retirement Fund Attacks Activision Blizzard and Its CEO Kotick

The author of the complaint is more precisely the Retirement Plan for Employees in New York City (NYCERS), one of the embodiments of the pension system established by New York State in 1920. This pension fund, which is based in Activision Blizzard’s capital, accuses Bobby Kotick of hastening Microsoft’s takeover bid for escape responsibility for the mistakes he is accused of as a director of the company. Notably, Bobby Kotick was directly involved in a Wall Street Journal investigation last November that alleged that Kotick had protected several employees accused of impropriety, and also reported an episode in which the CEO allegedly threatened an assistant with death over the phone. . To complete the portrait of the character, we also recently learned through the Wall Street Journalhim again, that a former companion of Kotick’s was given a restraining order in 2014 preventing him from approaching her after a case of harassment.

The NYCERS lawsuit, filed in the Delaware Court of Chancery, seeks to pressure companies to open their books and expose any wrongdoing. Besides Kotick’s exit door and golden parachute, the pension fund believes Activision Blizzard’s eagerness to do business with Microsoft hurt the company’s value. An argument that is already harder to swallow, because Microsoft has put $68.7 billion on the table at the rate of a $95.5 per share offer. We should also not forget that more than 98% of the shareholders have already voted happy for the acquisition, of course satisfied with this historic amount.

New York City requires Activision to provide a long list of documents, including documents related to the agreement with Microsoft, information about five potential buyers named in the official description of the Activision sale negotiations, and board notes“, reports the site axios who disclosed the existence of this complaint. The New York fund hopes to obtain internal documents that would implicate Bobby Kotick in the sexual abuse cases that have been causing a stir since last summer.

One thing is for sure, Microsoft’s Bobby Kotick and Phil Spencer have themselves acknowledged that negotiations were unusually swift for an operation of this caliber. According to the leaders, the exchanges that led to this landmark agreement only began last November, just as the Activision Blizzard boss was under unprecedented pressure following the Wall Street Journal’s groundbreaking investigation.

Given Kotick’s personal liability and responsibility for the deteriorating working conditions at Activision, it should have been clear to the board of directors that he was unfit to negotiate a sale of the company.“, criticizes the complaint. NYCERS denounces the fact that this quick deal makes it possible”Kotick and his fellow directors to avoid liability for their flagrant breaches of their fiduciary dutywe can read.

Microsoft opened acquisition talks on November 19, 2021, but the board did not hold a meeting until two weeks later, on December 1, 2021, to discuss Microsoft’s approach. Between those two dates, without board approval or actual Microsoft offering, Microsoft gleefully informed that it would be willing to accept an offer of $90 to $105 a share.the complaint states.

The speed at which Kotick moved to not only set a bid cap, but execute a deal was predictable. Not only did the merger provide Kotick and his fellow executives with a way to avoid responsibility for their blatant breaches of fiduciary duty, but it also provided Kotick with an opportunity for substantial unshared profits.she adds.

We disagree with the allegations in this complaint and look forward to presenting our case to the Court.An Activison Blizzard representative replied to the Games Industry site.

For Activision Blizzard, New York’s claim comes on top of complaints from the state of California that started the whole affair, relentless pressure from its activist workers who are still fighting for internal reform and a union, or even an investigation by the Securities and Exchange Commission, the US Federal Financial Markets Authority. It is in this context that the Federal Trade Commissionthe agency charged with monitoring anticompetitive trade practices and other monopolistic situations is currently investigating Microsoft’s takeover bid.

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