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Bloomberg Law is reporting former WWE head Vince McMahon and his insurers have agreed to pay $42.5 million to settle shareholder litigation challenging the merger between WWE and UFC, bringing the total settlement to $147.5 million after WWE's previously disclosed $105 million contribution.
The lead plaintiffs revealed the full settlement amount in a court filing Friday, accusing WWE parent TKO of making only "partial disclosures" in a securities filing that allowed "an incomplete picture of the full settlement" to spread to the media. The shareholders also argued that delays by the WWE defendants are "creating larger problems," pointing to a Thursday filing that highlighted a dispute between McMahon and his co-defendants over the terms of their indemnification agreements with insurers, the first sign of potential issues among the defendants.
The lawsuit, brought by several shareholders, alleges that when McMahon made the decision to sell WWE, the process was manipulated to take the offer from Endeavor to insure he would be able to remain with the company despite the scandal that led to his exit as an exec, thus depriving shareholders of the best possible price for WWE on the open market. TKO, who now owns WWE, was not a party to the lawsuit.
However, several current and former WWE execs, including Vince McMahon, could have been on the hook for massive financial damages if the lawsuit did not go their way - and had already been sanctioned by the court for their inability to bring forth certain material from that time period due to the use of Signal, a messaging app that deletes messages. The sanctions would have made it far harder for the defendants to defend against the allegations that the sale was manipulated to appease McMahon, who was seeking to return to WWE in an executive role.
There were a number of other potential suitors for the company, including AEW owner Tony Khan.
Thanks to Mike Informer.
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