Activision is being sued by New York City Employees' Retirement System, a group that alleges that Bobby Kotick was unfit to make a deal with Microsoft to sell the company following the reports of a "broken workplace" last year. Earlier this year, Microsoft announced its intent to purchase Activision Blizzard for just shy of $70 billion, making it the biggest gaming acquisition in history. The deal received plenty of pushback from politicians, investors, and even consumers, but as of last week, it's been well on its way to approval. Activision shareholders gave their approval for the Microsoft deal and legendary investor Warren Buffett also stated he believed that regulators would approve the deal. With all of that said, a new obstacle has been presented for the deal.
Following a lawsuit and reports of a poorly managed workplace at Activision last year, New York City Employees' Retirement System has filed a lawsuit claiming that Activision CEO Bobby Kotick rushed into the Microsoft deal to escape liability for misconduct. The group has shares of Activision stock and believes the actions of the company have devalued it. New York City is requesting documents based on the Microsoft deal, the company's internal handling of misconduct, and more. The suit alleges that Kotick was "unfit" to negotiate a deal with Microsoft due to all of the allegations and this was seen as a way for him to "escape liability". The group also claims that Microsoft undervalued the company with its $95/share, as the company's shares were trading around that price prior to the allegations and other lawsuits.
As it stands, there's no telling what will happen. Activision is already dealing with a wealth of legal problems ahead of the closure of the Microsoft deal. Should everything be approved, the deal is expected to close by summer 2023. In the meantime, Activision is operating as usual and recently announced its next game, Call of Duty: Modern Warfare II, which is slated to release this fall.