New Lawsuit Attempts to Block Vince McMahon's Sale of WWE

By Connor Casey

WWE has been hit with another lawsuit in the wake of Vince McMahon's return to the WWE Board of Directors and his attempts of selling the company. After initially "retiring" last July, McMahon approached WWE's Board last month with demands of being reinstated and named executive chairman so that he could oversee a potential sale. WWE's Board declined, prompting McMahon to threaten to use the 81% of voting power he has through his Class B stock ownership to block any sale or future media rights deals, the latter of which would deal a massive financial blow to the company. The WWE Board relented and McMahon officially returned on Jan. 6. 

He then attempted to change the company bylaws to make it impossible to sign off on a sale or media rights deal without his approval. That filing was then repealed this week, but a separate SEC filing stated the company bylaws were changed to where McMahon can now operate without the approval of stockholders.

However, McMahon's actions have already received pushback from shareholders. McMahon has already been sued for the previous bylaw changes and now Sportico is reporting that Detroit's Police and Fire Retirement System filed a lawsuit last Thursday that will attempt to block McMahon's return to the Board of Directors and prevent an expedited sale. The lawsuit will be recognized as a class action lawsuit after being filed in Delaware's Court of Chancery.

The complaint claims McMahon breached fiduciary duties by attempting 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." The lawsuit claims McMahon is in violation of Section 141 of the Delaware General Corporation Law and WWE's Charter, arguing that McMahon's actions, "usurps the power of the Board over critical corporate management functions and vests it solely in McMahon in his capacity as a stockholder." Stay tuned for more updates as they become available. 

McMahon asserted in the announcement of his return that he would only be back in the company to focus on the sale. However, numerous reports of McMahon trying to get involved in other departments have already started to pop up. Paul Levesque, who took over WWE's booking following McMahon's initial retirement, has since held two talent meetings explaining that nothing has changed as far as the booking. How long that will be the case remains to be seen. 

Trending Now: