Activision Blizzard has been the subject of more than a few controversies over the last couple of years, with multiple reports emerging and shedding light on the company’s problematic toxic workplace culture and persisting and widespread issues with abuse and harassment of employees. The company’s impending acquisition by Microsoft has only served to make things more complicated, and collectively, all of that has, unsurprisingly, led to legal consequences for it on multiple fronts (though one of the many lawsuits being faced by the company was recently settled).
Now, Activision Blizzard is facing another lawsuit. As reported by Axios, the company is being sued by New York City Employees’ Retirement System and pension funds for the city’s teachers, police, and firefighters. The group owns Activision stock, and in its lawsuit, it alleges that CEO Bobby Kotick has personal responsibility for the company’s issues, which, in turn, have devalued its stock, while the impending Microsoft acquisition has also been brought into question.
“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,” the lawsuit reads.
The lawsuit further claims that Bobby Kotick and fellow Activision Blizzard board members have tried to use the Microsoft deal to “escape liability for their egregious breaches of fiduciary duty”. Meanwhile, Microsoft’s valuation of the company at $95/share has also been said to be undervaluing the company, since it was already trading at close to that price before the company’s controversies kicked off last year.
The group is demanding that Activision Blizzard hand over a bevy of internal documents, relating to the Microsoft deal, five other companies that were also potential buyers at one point, board memos, as well as documents that can help ascertain Bobby Kotick’s knowledge of the company’s sexual harassment issues (which, according to reports, is something that he was aware of and swept under the rug for long time).
Earlier this year, it was reported that Microsoft began talks with Activision Blizzard regarding potential buyout merely three days after reports of the company’s workplace issues were published. It’s also been reported that once the Xbox and Activision deal is finalized (which will be sometime in 2023), Bobby Kotick will step down from his role at the company- though it seems that isn’t something that’s been internally discussed just yet.