A WWE shareholder has filed a lawsuit against Vince McMahon.
On January 10, WWE announced that McMahon had been unanimously elected the Executive Chairman of the Board, just a few days after he returned on January 6. He retired on July 22 amid a WWE board investigation into allegations of sexual misconduct and hush money. According to an SEC filing, alongside McMahon’s return, Alan M. Wexler, JoEllen Lyons Dillon, and Jeffrey R. Speed were removed from the board, while Man Jit Singh and Ignace Lahoud resigned. Additionally, Michelle Wilson and George Barrios returned to the board.
Mike Leonard of Bloomberg reports that a shareholder is suing McMahon in Delaware’s Chancery Court. The suit alleges that McMahon used his voting control on the WWE Board of Directors to replace them with “loyalists” and consequently make changes to the bylaws that would “impose his will on the board and WWE.” Leonard noted that a spokesperson for McMahon and WWE did not respond to a request for a comment.
The class action lawsuit accuses McMahon of timing his return so that he could be in control of WWE’s upcoming negotiations of media rights deal, and that McMahon forced his way back onto the WWE board by threatening to withhold his support for any potential deal that he didn’t participate in.
According to the proposed class action, McMahon timed his return to seize control of upcoming negotiations over the company’s expiring media rights, the “lifeblood” of the business, and forced his way back by leveraging a threat to withhold support for any deal reached without his participation. The suit also alleges that McMahon violated Delaware law with his move to “take complete personal control over any major corporate decision” by “adding his cronies to the board.”
The filing notes that the cause of action was a breach of fiduciary duty, per Section 141 of the Delaware General Corporation Law, and that the class action is seeking invalidation of he bylaw changes, along with costs and fees. It was also noted in the complaint that the class size could potentially be thousands of shareholders.
McMahon announced his intention to return to WWE on January 5 so he could participate in upcoming media rights negotiations and a potential WWE sale.
In November, WWE announced that the investigation of McMahon was complete.
WrestleZone will provide more details as they become available.
