NY suit alleges Kotick pushed through Microsoft deal to protect himself

Source: Activision


Another lawsuit, originally reported by Axios, has landed on the increasingly overloaded desk of Bobby Kotick this week. The Activision CEO has been notified of the suit filed by the New York City Employees Retirement System (NYERS) and pension funds for the city’s teachers, police, and firefighters. The suit revolved around Activision’s sale to Microsoft, and Kotick’s conduct around that.


First up, for those wondering why teachers, police officers and firefighters are invested in this situation, it is important to know that the groups own Activision stock. With this in mind, they are taking action against Kotick as they believe actions by both him and the gaming giant’s management generally hurt the company’s value, which thereby lost the NYERS group money.


The suit specifically relates to Activision-Blizzard-King’s (ABK) sale to Microsoft, and Kotick’s role in that deal. According to the suit, Kotick should not have been involved in the negotiations at all, saying in no uncertain terms, “Given Kotick’s personal responsibility and liability for Activision’s broken workplace, it should have been clear to the Board that he was unfit to negotiate a sale of the Company, but it wasn’t”.

Microsoft deal a way out for Kotick?

However, the suit also alleges Kotick favored the Microsoft bid because it allowed him a swift indemnification regarding the allegations being made at Activision and Blizzard. The suit also claims the Microsoft deal, which is pending approval, allows “Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty.”


NYERS believe Microsoft’s bid of $95 a share is significantly lower than Kotick and the board should have considered, citing the fact the firm was trading at close to that figure prior to the scandals breaking. This is an interesting point, as it assumes ABK will bounce back at some point, which is something many industry folk are more skeptical about.

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