WWE has disclosed that Vince McMahon agreed to pay the legal fees in the dropped lawsuit from the company’s stockholders relating to his return to the Board of Directors earlier this year.
The Detroit Police and Fire Retirement System as well as stockholder Scott Fellows had filed lawsuits in January that alleged McMahon breached his fiduciary duties with his return to WWE’s Board of Directors in order to execute a sale of the company.
Pwinsider reports that in an SEC filing made on Friday, WWE noted that the lawsuits were combined but then dropped when McMahon agreed to repeal the challenged bylaw amendments that were at issue.
The filing states that McMahon agreed to pay the plaintiff’s counsel $1.65 million in legal fees, including expenses.
The plaintiffs filed a motion to withdraw the case on January 23rd, and it was granted a couple of days later.
You can check out the full SEC filing below:
In re World Wrestling Entertainment, Inc. Stockholders Litigation, C.A. No. 2023-0028-JTL (Del. Ch.)
On January 10, 2023, a stockholder of World Wrestling Entertainment, Inc. (the “Company”), Scott A. Fellows, filed a direct class action against Vincent McMahon in the matter styled Fellows v. McMahon, C.A. No. 2023-0022-JTL (Del. Ch.) in the Delaware Court of Chancery (the “Court”). The lawsuit alleged that McMahon breached his fiduciary duties and violated Section 141(a) of the General Corporation Law of the State of Delaware and the Company’s certificate of incorporation by executing a written consent in January 2023 to amend certain Company bylaws to allegedly restrict the power of the Company’s board of directors. On January 12, 2023, another Company stockholder, Police & Fire Retirement System of the City of Detroit, filed a direct class action against McMahon and named the Company as a nominal defendant, which made substantially the same allegations as in the Fellows action. These two actions were subsequently consolidated.
Following discussions among counsel for the plaintiffs and McMahon, McMahon agreed to repeal the challenged January 2023 bylaw amendments by written consent, which McMahon executed on January 16, 2023. On January 23, 2023, the plaintiffs filed a motion that, among other things, sought dismissal of the consolidated action as moot, with the Court reserving jurisdiction solely for consideration of an application for attorneys’ fees and expenses. The Court granted that motion on January 25, 2023.
In lieu of an application for attorneys’ fees and expenses and after engaging in arms’-length negotiations, McMahon agreed to make a payment to plaintiffs’ counsel in the amount of $1,650,000 in attorneys’ fees (inclusive of expenses). The Court has not been asked to review, and will pass no judgment on, the payment of a fee or its reasonableness.
Within three business days after this Current Report on Form 8-K (“Form 8-K”) has been filed with the Securities and Exchange Commission, the Company will file an affidavit with the Court certifying that the Form 8-K has been filed and, after the affidavit has been filed, the consolidated action will be closed for all purposes and the Court will no longer retain jurisdiction over it.
Plaintiffs are represented by Ned Weinberger and Mark Richardson, of Labaton Sucharow LLP, 222 Delaware Avenue, Suite 1510, Wilmington, Delaware 19801, (302) 573-2540 and Joel Friedlander, Christopher Foulds, and David Hahn of Friedlander & Gorris, P.A., 1201 Wilmington, Delaware 19801, (302) 573-3500, McMahon is represented by Michael Pittenger, T. Brad Davey, and Eric Nascone of Potter Anderson & Corroon LLP, 1313 N. Market Street, Wilmington DE 19801, (302) 984-6000, and the Company is represented by Daniel Kramer, Richard Tarlowe, and Gregory Laufer of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, NY 10019-6064, (212) 373-3000 and Matthew Stachel of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 500 Delaware Avenue, Suite 200, P.O. Box Wilmington, Delaware 19899-0032, (302) 655-4410.
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