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Delaware Court Allows Shareholder Lawsuit Against Activision Executives to Proceed

Tina TinaChouhanbyTina TinaChouhan
October 4, 2025
Delaware Court Allows Shareholder Lawsuit Against Activision Executives to Proceed

A Delaware judge has determined that former Activision Blizzard executives, including long-time CEO Bobby Kotick, must respond to significant shareholder allegations accusing them of undervaluing the company during Microsoft’s $75.4 billion acquisition of the gaming giant. Chancellor Kathaleen McCormick of the Delaware Chancery Court ruled on Thursday to advance the core claims in the shareholder lawsuit, spearheaded by the Swedish pension fund Sjunde AP-Fonden. The lawsuit contends that Kotick and other board members violated their fiduciary responsibilities to investors during the merger negotiation and approval process in 2023. It asserts that Kotick was driven by personal interests, such as maintaining his executive role and obtaining around $400 million in change-of-control benefits.

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Additionally, he is accused of advocating for a swift sale to Microsoft to protect himself from growing allegations regarding widespread sexual harassment and workplace misconduct at Activision. Shareholders also claim that the acquisition price of $95 per share was initially too low and that the deal appeared increasingly disadvantageous as Activision’s financial performance improved during the 21-month regulatory review leading up to the merger’s completion in October 2023. In her extensive 83-page opinion, McCormick noted sufficient allegations that Kotick may have manipulated the sales process to favor Microsoft, which offered speed, deal certainty, and, presumably, a friendly environment.

The court deemed it reasonably conceivable that Activision’s directors placed Kotick’s personal interests above those of shareholders by approving a deal that undervalued the company while its stock price was impacted by public scrutiny over workplace issues. However, McCormick dismissed two claims against Microsoft, ruling that the tech company did not assist or encourage the alleged breaches by Activision’s leadership. She found insufficient evidence to hold Microsoft legally accountable, even if it had remained passive during the relevant events. Other claims against Activision’s executives were also thrown out. McCormick stated, “Litigation on the merits of a trimmed-down version of the plaintiff’s complaint can now launch.

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Game on.” This ruling allows the lawsuit to continue, potentially revealing new insights into the management of one of the gaming industry’s largest and most controversial mergers. As of Friday, legal representatives for both the Activision defendants and Microsoft declined to comment on the ruling, while the shareholders’ representatives did not respond immediately to similar inquiries. The case, titled Sjunde AP-Fonden v. Activision Blizzard Inc. et al., is under consideration in the Delaware Chancery Court, case number 2022-1001. If the claims are substantiated, they could significantly impact corporate governance and executive accountability in major mergers and acquisitions, particularly within the gaming and technology sectors.

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