New York City Files Complaint Against Activision Blizzard for Wrongdoing Tied to Microsoft Acquisition

Per the suit, the same plaintiffs had originally requested to inspect the company’s books in October of last year following the numerous reports of an unsafe working environment for minority and women employees at the company as well as CEO Bobby Kotick’s apparent knowledge and dismissal of said environment. Activision complied with some of their requests, but not all.

While all this was going on, Activision announced its pending acquisition by Microsoft, but this only furthered concerns. Plaintiffs point out that if the merger goes through, it will “have the effect of extinguishing these highly valuable derivative claims against Activision’s Board” as well as Kotick, who will be “able to escape liability and accountability entirely.”

Further, they note that Kotick was allowed by the board to negotiate the deal with Microsoft “despite his potential liability for breaches of fiduciary duty,” and despite the fact that he stands to benefit substantially from the merger aside from the direct benefits from the purchase price.

With all this, the plaintiffs conclude that it is “unsurprising” that Activision ended up “seriously undervalue[d]” at $95 per share — only a 1% premium over its stock price before the initial California discrimination suit. They note that the price was rapidly negotiatied largely by Kotick himself, who “without Board authorization or an actual offer from Microsoft” suggested an offer between $90 and $105 per share. They accuse Kotick and the board of speeding through the deal in an effort to “escape liability for their egregious breaches of fiduciary duty.”

Microsoft Acquires Activision Blizzard: The Story So Far

Though it is unclear what, if any, actual wrongdoing might be revealed should New York gain access to the numerous documents it is requesting, as Axios points out, there is already a traffic jam of lawsuits piling up against Activision Blizzard both related to the accusations of discrimination as well as activities related to the acquisition.

At the latest count, this included a federal harassment suit, the California discrimination suit, a class action lawsuit, four shareholder lawsuits, eight lawsuits related to the merger, this complaint from New York as well as another like it, an SEC investigation, and investigations into insider trading. Several of the suits are either in appeals or have been dismissed or consolidated, but plenty of others are still rolling onward as Activision Blizzard inches closer to finalizing its acquisition by Microsoft, though a planned review by the FTC may halt things further.

For the full context of the Activison Blizzard discrimination lawsuit, you can follow our timeline of events.

Rebekah Valentine is a news reporter for IGN. You can find her on Twitter @duckvalentine.