Activision Blizzard Sued by NYC Employee Pension Fund

The lawsuit alleges that Bobby Kotick was "unfit to negotiate a sale of the Company."

Published: May 4, 2022 1:42 PM /


Activision Blizzard Sued in NY May 2022 cover

Activision Blizzard has been sued in Delaware by the New York City Employees' Retirement System over allegations that Bobby Kotick was "unfit to negotiate a sale of the Company" and negatively impacted the stock value.

Microsoft announced its intention to acquire Activision Blizzard in January of this year. That deal was approved by a shareholder vote last week. Unfortunately, the company's legal troubles continue and yet another lawsuit has been filed over the acquisition deal.

Another Activision Blizzard Lawsuit Seeks to Stall Microsoft Acquisition

Axios reports (by way of Reddit) that Activision Blizzard has been sued by the New York City Employees’ Retirement System and pension funds representing New York City teachers, police, and firefighters. All of these groups own Activision stock. The lawsuit alleges that actions by management (including Bobby Kotick) has negatively impacted the value of the stock that they hold.

The crux of the complaint is detailed in the court documents.


19. 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. According to the Proxy, the Board chose Kotick to lead negotiations on behalf of Activision, while the Board itself seemingly took a hands-off approach. Microsoft opened acquisition discussions on November 19, 2021, but the Board did not hold a meeting to discuss Microsoft’s outreach until two weeks later, on December 1, 2021.

20. In that window, without Board authorization or an actual offer from Microsoft, Kotick blithely informed Microsoft that he would be willing to accept an offer in the range of $90-$105 per share. Microsoft then duly made an offer at the bottom of Kotick’s arbitrary range, $90, on December 10, 2021. By December 16, 2021, despite multiple other interested parties not identified by name in the Proxy, Activision and Microsoft had already executed a 30-day confidentiality agreement.

21. The speed with which Kotick moved to not just set an offer ceiling, but to execute an agreement, was to be expected. Not only did the Merger offer Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty, but it also offered Kotick the chance to realize substantial nonratable benefits. As detailed in the Subsequent 220 Demand, these included significant bonuses that Kotick could receive for simply ensuring that Activision complied with the law.


A major issue (although not the only issue) is that the rapid negotiations and the perceived low price of the proposed Microsoft acquisition may have not made shareholders as much money as it could have. The lawsuit seeks additional documentation to investigate these claims, lawyer's fees, and any other payment that the court may deem necessary.

It is important to mention that this lawsuit does not specifically seek financial compensation for the alleged low price of the acquisition. That is likely because the plaintiffs do not have the necessary documentation to evaluate this claim. Additional lawsuits may follow if the court allows the plaintiffs to investigate the documentation requested by this new Activision Blizzard lawsuit.

Activision Blizzard has been heavily criticized over allegations of toxic workplace culture and sexual harassment. These criticisms have come from several U.S. state treasurers, the heads of both PlayStation and Xbox, and a group of activist shareholders, among many others. The company is also embroiled in lawsuits, unionization disputes with staff, and conflicts with government agencies.

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