Activision Blizzard Is Now Being Sued By NYC For Rushing To Sell The Company

The target of the lawsuit is reportedly Activision CEO Bobby Kotick.

24 Comments

Following news that Microsoft is purchasing Activision Blizzard in an unprecedented $70 billion dollar deal, a new lawsuit has been filed against the the Call of Duty publisher. Filed by the New York City Employees’ Retirement System on April 26, the suit claims that CEO Bobby Kotick's rush to sell Activision following accusations of workplace misconduct has negatively impacted the company's value, ultimately devaluing the stock they own.

According to Axios, the lawsuit alleges Kotick was "unfit to negotiate a sale of the company" given his "personal responsibility and liability for Activision’s broken workplace." New York claims that deal not only hurt their financial holdings, but also served as a way for Kotick and other Activision directors to "escape liability for their egregious breaches of fiduciary duty."

Thanks to an action permitted by Delaware's Court of Chancery, New York City is therefore allowed to press Activision to "open their books and potentially expose wrongdoing." New York City is demanding that Activision provide numerous documents related to the Microsoft deal, as well as information regarding other possible buyers, descriptions of the sales talks, board memos, and more. When GameSpot reached out to Activision Blizzard to comment on the lawsuit, a representative said, "We disagree with the allegations made in this complaint and look forward to presenting our arguments to the Court.”

This is not the first time the city has pressed Activision for internal documents. According to the report, New York City has been asking for reports regarding Activision's toxic workplace since last fall in an attempt to find out what Kotick knew of sexual misconduct at the company. This is also not the first lawsuit Activision has faced alleging a gross mishandling of operations. Since last summer, the company has dealt with a federal harassment suit, a discrimination suit, a class action suit, four shareholder lawsuits, a SEC investigation, and more. In addition, Kotick himself has been accused of knowingly covering up instances of sexual harassment and threatening to kill an employee.

As of right now, Microsoft's deal to buy Activision Blizzard has not been fully approved. The buyout must face regulatory scrutiny, experts say, though it is ultimately expected to be approved. If that does happen, Microsoft will own Activision Blizzard and all of its studios and franchises, including Call of Duty, Overwatch, Warcraft, Diablo, and more.

In other Activision Blizzard news, the company recently released its quarterly financial report to reveal a sharp decline in revenue, player numbers, and Call of Duty unit sales. For the quarter ending March 31, Activision Blizzard generated revenue of $1.77 billion--a far cry from last year's $2.28 billion during the same period. However, it's worth noting that video game spending during the quarter dropped in the US overall.

The products discussed here were independently chosen by our editors. GameSpot may get a share of the revenue if you buy anything featured on our site.

Got a news tip or want to contact us directly? Email news@gamespot.com

Join the conversation
There are 24 comments about this story