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Judge Allows Shareholder Lawsuit Against Activision Blizzard Executives to Proceed

By  |  October 12, 2025

A Delaware judge ruled that former Activision Blizzard executives, including longtime Chief Executive Bobby Kotick, must face most of a shareholder lawsuit claiming they undervalued the company during its $75.4 billion sale to Microsoft. According to Reuters, Chancellor Kathaleen McCormick of the Delaware Chancery Court said on Thursday that shareholders could pursue their central claim that Kotick and other board members breached their fiduciary duties in approving the deal.

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    The lawsuit, brought by Swedish pension fund Sjunde AP-Fonden, accuses Kotick of prioritizing personal gain over shareholder interests. The plaintiffs allege that he pushed for a quick sale to maintain his position and secure approximately $400 million in change-of-control benefits, while also shielding himself from potential liability tied to claims of workplace harassment at Activision. Per Reuters, shareholders also contend that the agreed-upon $95 per share price was too low, especially as the company’s financial performance improved during the lengthy 21-month regulatory review process before the acquisition closed in October 2023.

    Read more: Federal Appeals Court Dismisses FTC Challenge to Microsoft’s Activision Acquisition

    In an 83-page ruling, McCormick said there were sufficient grounds to suggest that Kotick influenced the sales process to favor Microsoft because it offered “speed, deal certainty, and—inferably—a friendly landing place.” She added that it was “reasonably conceivable” that Activision’s directors prioritized Kotick’s interests, potentially approving a lower sale price while the company’s stock value was depressed by ongoing harassment allegations.

    Kotick’s legal representatives disputed the underlying allegations in an October 7 letter sent after publication of the Reuters report. “Not a single investigation, court finding, verdict, or ruling ever concluded that there was any merit” to the claims of widespread harassment at Activision, attorneys Tom Clare and Nick Brechbill of Clare Locke wrote.

    While allowing the core claims to proceed, McCormick dismissed two counts against Microsoft, ruling that the tech giant did not aid or abet the alleged misconduct, even if it may have “passively stood by.” Other claims against the Activision defendants were also dismissed. “Litigation on the merits of a trimmed-down version of the plaintiff’s complaint can now launch,” McCormick wrote, concluding with, “Game on.”

    Source: Reuters