Want more wrestling news, rumors, and results? Be sure to visit PWInsider.com and PWInsiderXtra.com.
Bloomberg News is reporting that a WWE shareholder, Scott Fellows, filed a lawsuit against Vince McMahon in the Chancery Court of Delaware yesterday, alleging that Vince McMahon has violated WWE’s Charter and breached his Fiduciary Duty as Controlling Stockholder with his return to the company as the Chairman of WWE's Board of Directors.
Fellows is alleging, basically, that McMahon strong-armed his way back into the company and added an amendment that would prevent the company from executing any deals without McMahon's approval.
In the suit, Fellows notes:
Following an investigation into allegations of sexual harassment against McMahon, the Board unanimously determined it was not in the best interests of the Company and its stockholders for McMahon to return to WWE. Nonetheless, McMahon executed the Written Consent to remove certain directors who opposed him and add himself and two cronies to the Board. The Stockholder Approval Amendment went further and usurped the power of the Board to manage the affairs of the Company. It even prohibits the Board and officers from advocating for transactions McMahon may oppose even if they believe those transactions are in the best interests of the Company and its stockholders.
As such, McMahon violated his fiduciary duties by executing the Written Consent.
Plaintiff is entitled to a declaration that the Stockholder Approval Amendment is void and invalid. Plaintiff has no adequate remedy at law.
The Amendment in question, according to the lawsuit:
The Stockholder Approval Amendment violates Section 141 of the DGCL and WWE’s Charter, which vests management of the Company with WWE’s Board. The Stockholder Approval Amendment was also adopted for the inequitable purpose of holding the Board and management hostage with respect to virtually every major strategic decision.
The Stockholder Approval Amendment prevents the Board or management from, directly or indirectly, authorizing, agreeing to, permitting, endorsing, recommending, approving, or effecting a new media rights agreement, a significant stock issuance, or an agreement that deters replacing directors without the prior approval of stockholders, i.e., McMahon.
Fellows is asking the Court to rule his lawsuit as a class action lawsuit so other shareholders can join.
He is also asking for a declaration that McMahon has breached his fidiciary duties and that recent Stockholder Approval Amendment made since McMahon's return actually violates the company's charter, invalidating the Amendment. He is also asking that the Court awards him damages covering the cost of the lawsuit including his attorney, accountant and expert witness fees.
Given that the suit was filed yesterday, obviously neither WWE or McMahon have been served yet.
If you enjoy PWInsider.com you can check out the AD-FREE PWInsider Elite section, which features exclusive audio updates, news, our critically acclaimed podcasts, interviews and more by clicking here!
Bang On Casino
