New York sues Activision for rushing Microsoft deal to save Bobby Kotick

Activision Blizzard continues to add problems while waiting for regulators to approve Microsoft’s purchase. On this occasion, the company was sued by the city of New Yorkwho accuses them of having accelerated the agreement with Microsoft so that Bobby Kotickits current CEO, could shirk its responsibilities in the scandals surrounding the editor video games for years.

The lawsuit against Activision Blizzard was filed since April 26 by the New York City Employees Retirement System, according to reports. Axios. In principle, these accusations are not intended to prevent the acquisition of Microsoft, but get Bobby Kotick to face the consequences problems that arose during its administration.

New York demands that Activision share key data related to the agreement with Microsoft. This includes, for example, information about the identity of five other potential buyers, how the negotiation of the sale was conducted and memoranda from the board of directors.

Additionally, they are asking Activision to provide a series of documents that could reveal what Bobby Kotick knew about sexual misconduct situations. The American city considers that because of the scandals that the company is going through, the right conditions were not met to negotiate a sale.

Now was not the time to sell

“Given Kotick’s personal liability in Activision’s shattered work environment, it should have been clear to the board that he was unable to negotiate the sale of the company. But this was not the case,” say the New York authorities.

The lawsuit suggests that Microsoft’s purchase of Activision is a lifeline for Bobby Kotick and other managers, since this would allow them to avoid their responsibilities and, at the same time, take away a significant sum of money.

And speaking of the economic aspect, New York also takes advantage of the document to throw a dart against those of Redmond. They mention that Microsoft’s $95 per share tender offer undervalues ‚Äč‚ÄčActivision. In fact, they mention it was their value before their work issues became public. However, it seems that this question does not seem too important for the shareholders, since only this week they approved the sale to Microsoft.

Was Bobby Kotick aware of the working environment at Activision?

While the lawsuit demands that Activision provide documents shedding light on what Bobby Kotick actually knew about the scandals, an investigation by The Wall Street Journal already published information about it. According to the aforementioned media, the director knew very well what was going on. Indeed, he would have been directly involved in the protection of an executive accused of sexual harassment.

On the other hand, still according to WSJ, Kotick harassed and threatened to kill one of his assistants through a voicemail. He even allegedly fired a flight attendant who accused him of sexual harassment without justification.

If the above wasn’t enough, last April The Wall Street Journal reported that in 2016 and 2019 Sheryl Sandberg, chief operating officer of Meta and ex-partner of Bobby Kotick, used her influence to intimidate a British media outlet with the aim of preventing it from publishing an article that left the leader in a bad light. Specifically, they recounted how Kotick had a restraining order to prevent him from continuing to harass an ex-girlfriend.

Negotiations with Microsoft which progressed very quickly

As the New York lawsuit highlights, the negotiation between Activision Blizzard and Microsoft has accelerated. The Redmonds’ first approach came days after the devastating report of The Wall Street Journalwhich was released on November 16, 2021. Of course, it is difficult to think that it was a simple causality.

Just two months after first contact, Microsoft announced the purchase of Activision Blizzard for $68.7 billion, making it the largest acquisition in video game history. Before shaking their hands, yes, Bobby Kotick and his managers asked for a greater economic effort to accept the purchase. After all, by also being shareholders, their pockets benefit.

The takeover of Activision Blizzard by Microsoft still waiting for the green light from regulators. However, it is clear that more and more obstacles stand in the way. Even if the acquisition goes through, no one will forget that Bobby Kotick and other executives have bills to pay.