Detroit’s Police And Fire Retirement System Suing Vince McMahon – According to Sportico, Detroit’s Police and Fire Retirement System have sued WWE executive chairman Vince McMahon.
They are seeking a declaration that would effectively block McMahon from regaining control of WWE’s board of directors and prevent him from expediting a sale.
The complaint was filed in Delaware’s Court of Chancery. They ask it be recognized as a class action on behalf of other WWE stockholders.
The complaint argues that McMahon has “breached fiduciary duties as controlling stockholder” by trying to “impose his personal will on WWE and its [board] by purporting to adopt a package of invalid and inequitable bylaw amendments that would hamstring the Board from making critical business decisions.”
McMahon owns approximately 39% of WWE’s equity, about 92% of outstanding Class B shares (which counts for 10 votes per share as opposed to Class A shares, which counts for one vote per share). McMahon controls 81% of WWE’s total voting power.
According to the complaint, McMahon’s moves run afoul of both Section 141 of the Delaware General Corporation Law and WWE’s charter. Altering the company’s governance structure in the absence of bargained for exchange between WWE and McMahon, the system asserts, “usurps the power of the Board over critical corporate management functions and vests it solely in McMahon in his capacity as a stockholder.” Neither Delaware law nor WWE’s charter permits the kind of transfer of power the system says occurred, and the system wants a declaration the consent is void.
The complaint is similar to the lawsuit filed by shareholder Scott Fellows on January 11.
WWE is reportedly exploring options regarding the sale of the company and has taken action in engaging with outside advisors to help with negotiations for upcoming media rights deals.
McMahon officially returned to the board of directors on January 6, claiming he needed to return to help lead the upcoming round of media rights negotiations. On January 16, a filing was made that stated McMahon no longer needs approval from WWE stockholders on actions taken moving forward.