A pension fund has filed a lawsuit against Vince McMahon, Nick Khan, Paul Levesque and others within TKO that challenges the merger between WWE and UFC, which became official this past September.
According to the complaint filed by investors, WWE board members “conjured up a sham sales process” designed to favor Endeavor and “exclude other bidders seeking to axe” Vince McMahon, disregarding at least two all cash offers with betters terms.
The lawsuit was filed by shareholders back on November 22 in Delaware.
The lawsuit also alleges that McMahon pushed a “quick sale” of WWE to Endeavor chief Ari Emanuel, who is labeled as McMahon’s “close friend and longtime ally” who “proposed a sweetheart deal”, which allowed McMahon to stay on as executive chairman, thus avoiding any scrutiny in connection with sexual misconduct allegations.
Furthermore, the complaint also alleges companies submitted cash offers at $95-$100 and $90-$97.50 per share. But because they contemplated cashing out WWE stockholders and barred McMahon from rolling over his shares, this would have signaled his “complete ouster” from WWE. In addition, the board “never bothered to make” counterproposals.
The suit also states the following complaints:
-If McMahon was found to have breached his duty of loyalty, WWE stockholders could have sought his removal as a director. Such scrutiny appears to have prompted McMahon to seek a ‘quick’ sale of the Company that also allowed him to continue running WWE.
-Not only did Vince McMahon secure a future for himself at post-merger WWE, McMahon also stuffed his pockets and those of his loyalists before agreeing to a deal.
-The $21 billion price tag undervalues WWE. The suit claims that this is far below the offers the board could have obtained from multiple other bidders had it made any effort to negotiate in good faith.
Block & Leviton LLP is counsel for the pension fund. Palkon is represented by Bernstein Litowitz Berger & Grossmann LLP.
The source of information for this report is courtesy of Fightful.