An Ohio pension fund equipped with substantial experience in litigating cases involving sexual misconduct has been appointed to lead the consolidated litigation contesting the $21.4 billion merger between World Wrestling Entertainment Inc. (WWE) and Ultimate Fighting Championship (UFC). This decision was handed down by Vice Chancellor J. Travis Laster of the Delaware Chancery Court on Thursday.
Vice Chancellor Laster emphasized that the fund had strategically targeted the defendants and filed the claims they deemed most potent. The Ohio pension fund holds a more significant stake in WWE compared to a competing Michigan pension fund, which played a role in the court’s decision. Investor Dennis Palkon and the Laborers’ District Council and Contractors’ Pension Fund of Ohio have been chosen to lead the lawsuit over a similar claim by the City of Pontiac Reestablished General Employees’ Retirement System.
The legal challenge focuses on allegations that Vince McMahon and other WWE senior leaders orchestrated a merger with UFC that disproportionately benefited McMahon personally. This merger arrangement followed McMahon’s return to WWE amidst allegations of sexual misconduct and harassment spanning several decades.
In May 2023, shareholders dropped a lawsuit against McMahon after he agreed to repay $17.4 million used by WWE to investigate these allegations. McMahon resigned as the executive chairman of TKO Group Holdings, the parent company of UFC and WWE, in January 2024 after another allegation of sexual misconduct surfaced.
Palkon and the Ohio pension fund are represented by Block & Leviton and Bernstein Litowitz. Their legal representatives argued on July 30, 2024, that a women-led legal team with significant experience in handling sexual misconduct cases should spearhead the litigation against the merger. Vice Chancellor Laster agreed, underscoring that the Ohio fund’s attorneys have superior experience in this area.
At the time of the merger, Palkon held 7,162 shares of WWE, which accounted for about 8.2% of his portfolio. The Ohio pension fund owned 5,669 shares, while the competing Pontiac fund held 1,354 shares, as outlined in their application briefs.
The case is officially titled In re World Wrestling Ent. Inc. Merger Litig., Del. Ch., No. 2023-1166.
For more details, visit the full article on Bloomberg Law.