NYC lawsuit claims Kotick was ‘unfit’ to negotiate Activision Blizzard sale to Microsoft

Activision Blizzard CEO, Bobby Kotick, has come under fire over the last year, with thousands of employees campaigning to oust him from the company. Instead of stepping down, Kotick decided to negotiate a lifeline deal from Microsoft, something that New York City politicians aren't too happy about. 

In a new lawsuit filed by New York City officials (via Axios), Kotick is accused of attempting to rush through a sale to Microsoft in order to avoid liability. This follows a report last year, in which sources claimed Kotick was aware of a number of sexual harassment allegations levied at executives, which he failed to address appropriately.

The lawsuit seeks to determine exactly how much Kotick knew when it comes to the misconduct that seemingly ran rampant throughout Activision Blizzard studios. Activision Blizzard is also being sued by the California Department of Fair Employment and Housing for failing to provide a safe and fair working environment for employees. It is believed that the pressure from the lawsuit, combined with a barrage of negative press, ultimately led Kotick to seek a buyer for the company.

The NYC lawsuit alleges that Kotick was unfit to negotiate a sale of the company and should not have had the power to do so. The lawsuit goes on to add: “Not only did the Merger offer Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty, but it also offered Kotick the chance to realize substantial nonratable benefits.”.

Microsoft began negotiating the Activision Blizzard deal in late 2021 and by January, the deal was finalised and announced. Currently, the acquisition is going through regulatory checks, with the goal of clearing approvals and closing the deal by June 2023.

KitGuru Says: One of the biggest criticisms against the acquisition has been that it provides Kotick with a ‘golden parachute'. Activision Blizzard has not yet responded to this lawsuit, but a counter filing should pop up soon. 

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