WWE Shareholder Files Lawsuit Against Vince McMahon Following Return

WWE

The first lawsuit against Vince McMahon since his return to WWE has been filed, per Bloomberg News.

The report claims that WWE shareholder Scott Fellows filed a lawsuit against McMahon in the Chancery Court of Delaware yesterday (January 10).

The filing alleges that McMahon violated WWE’s Charter and breached his Fiduciary Duty as Controlling Stockholder with his return to the company as the Chairman of WWE’s Board of Directors.

McMahon used his power as the majority WWE shareholder to re-elect himself onto the board of directors, along with George Barrios and Michelle Wilson.

In the process, three board members were removed, those being JoEllen Lyons Dillon, Jeffrey R Speed and Alan M Wexler.

After that, Man Jit Singh and Ignace Lahoud resigned from their roles on the board.

Fellows said in the suit:

Following an investigation into allegations of sexual harassment against McMahon, the Board unanimously determined it was not in the best interests of the Company and its stockholders for McMahon to return to WWE. Nonetheless, McMahon executed the Written Consent to remove certain directors who opposed him and add himself and two cronies to the Board. The Stockholder Approval Amendment went further and usurped the power of the Board to manage the affairs of the Company. It even prohibits the Board and officers from advocating for transactions McMahon may oppose even if they believe those transactions are in the best interests of the Company and its stockholders.

As such, McMahon violated his fiduciary duties by executing the Written Consent.

Plaintiff is entitled to a declaration that the Stockholder Approval Amendment is void and invalid. Plaintiff has no adequate remedy at law.

The Stockholder Approval Amendment, per the suit, is described as the following:

The Stockholder Approval Amendment violates Section 141 of the DGCL and WWE’s Charter, which vests management of the Company with WWE’s Board. The Stockholder Approval Amendment was also adopted for the inequitable purpose of holding the Board and management hostage with respect to virtually every major strategic decision.

The Stockholder Approval Amendment prevents the Board or management from, directly or indirectly, authorizing, agreeing to, permitting, endorsing, recommending, approving, or effecting a new media rights agreement, a significant stock issuance, or an agreement that deters replacing directors without the prior approval of stockholders, i.e., McMahon.

Fellows has requested that the court rule his lawsuit as class action, allowing other shareholders to join.

Fellows is asking for a declaration that Vince breached his fidiciary duties, and that the Stockholder Approval Amendment made since his return violates the company’s charter, making the Amendment invalid.

Fellows is also requesting for the Court to award him damages covering the cost of the lawsuit including his attorney, accountant and expert witness fees.

This came on the same day that Stephanie McMahon resigned from her role as co-CEO and chairwoman in the company, along with her role on the board of directors.

Stephanie’s resignation means that Nick Khan is now the sole CEO of WWE, with Vince McMahon the executive chairman.

As of now, Paul Levesque remains as the company’s Chief Content Officer.

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• shareholder
• lawsuit
• Vince McMahon
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