Activision Blizzard continues to add problems while waiting for regulators to approve the purchase of Microsoft. On this occasion, the company has been sued by the city of New Yorkwhich accuses them of having accelerated the agreement with Microsoft so that Bobby Kotickits current CEO, could evade his responsibilities in relation to the scandals surrounding the publisher of video games for years.
The lawsuit against Activision Blizzard was filed since last April 26 by the Employees Retirement System of the City of New York, according to reports Axios. In principle, these accusations are not intended to stop the acquisition of Microsoft, but cause Bobby Kotick to face the consequences of the problems that occurred during his administration.
New York is demanding that Activision share key data related to the agreement with Microsoft. This includes, for example, information on who the other five potential buyers were, how the sale negotiation was conducted, and memorandums from the board of directors.
In addition, they demand that Activision provide a series of documents that could reveal what Bobby Kotick knew about the situations of sexual misconduct. The American city considers that, due to the scandals that the company is going through, the right conditions were not met to negotiate a sale.
It wasn’t a time for a sale
“Given Kotick’s personal responsibility for Activision’s broken work environment, it should have been clear to the Board that they were not in a position to negotiate the sale of the company. But that was not the case,” the New York authorities indicate.
The lawsuit hints that Microsoft’s purchase of Activision is a lifeline for Bobby Kotick and other managers, as it would allow them to evade 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 takeover offer is undervaluing Activision. In fact, they mention that this was his value before his work problems were made public. However, it seems that this issue does not seem to matter too much to the shareholders, since just this week they approved the sale to Microsoft.
Was Bobby Kotick aware of the work environment at Activision?
While the lawsuit demands that Activision provide documents that shed light on what Bobby Kotick actually knew about the scandals, an investigation by The Wall Street Journal already released information about it. According to the aforementioned medium, the director knew very well what was happening. In fact, he would have been directly involved in protecting a manager accused of sexual harassment.
On the other hand, always according to WSJ, Kotick harassed and threatened to kill one of his assistants through a voice message. He even wrongfully fired a flight attendant who accused him of sexual harassment.
If the above were not enough, last April The Wall Street Journal reported that, in 2016 and 2019, Sheryl Sandberg, director of operations of Meta and ex-partner of Bobby Kotick, used her influence to intimidate a British media with the aim of preventing them from publishing an article that left the manager in a bad light. Specifically, they narrated how Kotick had a restraining order to prevent him from continuing to harass an ex-girlfriend.
A negotiation with Microsoft that progressed very quickly
As the New York lawsuit points out, the negotiation between Activision Blizzard and Microsoft had an accelerated pace. The first approach of the Redmonds happened a couple of days after publishing the devastating report of The Wall Street Journalwhich was released on November 16, 2021. Of course, it is difficult to think that this 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 hands, yes, Bobby Kotick and his team asked for a greater financial effort to accept the purchase. After all, by also being shareholders, their pockets benefit.
The purchase of Activision Blizzard by Microsoft still pending green light from regulators. However, it is clear that more and more obstacles stand in the way. Even if the acquisition comes to fruition, no one will forget that Bobby Kotick and other executives have bills to pay.