Activision Blizzard's Latest Lawsuit Complicates The Microsoft Acquisition

Acquisitions have been taking place across the gaming industry for quite some time now but in January, the scale of such transactions reached new heights when Microsoft outlined their intentions to acquire Activision for a whopping $68.7 billion dollars. Activision is the home of major franchises like Call of Duty, Overwatch and World of Warcraft.

The acquisition follows allegations made against Activision Blizzard where employees accused the company of fostering a toxic culture that encouraged the racial and sexual harassment of female staff. Activision Blizzard are now being hit with a new lawsuit which could further complicate the Microsoft deal.

According to Axios, a lawsuit was filed by the New York City Employees’ Retirement System and pension funds for the city’s teachers, police, and firefighters on 26 April. As Activision Blizzard stockholders, the group believes that the Microsoft deal was rushed by CEO Bobby Kotick in order to avoid liability for the company’s legal problems, damaging stocks in the process.

Filed in Delaware, the lawsuit is a ‘Section 220 Complaint’ which essentially allows stockholders to pressure companies to open their books and expose any wrongdoings. Here, the group wishes to see all information relating to the Microsoft deal, any internal documents relating to Kotick’s prior knowledge of the company’s sexual misconduct, and access to books to potentially sue Kotick and the board for costing the company value.

The suit states, “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 suit went on to say that the Microsoft deal allows “Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty.” If legal proceedings are to escalate, the Microsoft deal could very well be delayed or complicated.