Posted on 6/09/126 by Colin Vassallo
Just hours before the WWE shareholders lawsuit was set to go
on trial, parties involved reached an agreement in
principle, getting this saga closer to an end after a few
years in the works.
The trial was set to start yesterday in Delaware’s Chancery
Court and the trial was removed from the calendar just a few
days before.
Former WWE CEO Vince McMahon, WWE President Nick Khan, and
former WWE execs George Barrios, Michelle Wilson, Frank
Riddick III, and Steve Koonin were all listed as defendants
in the lawsuit where plaintiffs accused McMahon of only
choosing Endeavor’s bid because he knew that he could keep
control over WWE after he sold, something that wasn’t the
case with other bidders.
A source close to Vince McMahon told us that this kind of
litigation follows every single transaction involving a
public company.
“Endeavor’s bid was by far the highest. It was signed off on
by three separate independent banks: JP Morgan, Raine and
Moelis,” the source said. “That’s why WWE’s Board of
Directors gave their unanimous approval.”
The merger of WWE and UFC under the TKO brand created a
massive combat sports company and “shareholders made an
absolute fortune” from the transaction, according to the
same source.
It’s hard to argue that fact.
In April 2023 before the acquisition was announced, WWE
shares were hovering in the $97 range. Today, TKO shares are
trading at $205, an increase of over 100% in the stock
market.
The trial could have also been somewhat of a disaster for
McMahon as well, as further details in his sexual misconduct
case could have been made public. During the discovery
process in the shareholders lawsuit, the plaintiffs
requested McMahon turn over tons of documents related to his
hush money case.
McMahon and Khan were also going to face an uphill battle on
the stand after the two were sanctioned by the Delaware
Chancery Court for acting “recklessly” by enabling a setting
to auto-delete Signal messages while WWE was in the process
of being sold to Endeavor.
The judge had ruled that he would presume several facts to
be true, including that McMahon’s decision-making regarding
the merger was influenced by Emanuel’s promises that he
would remain at WWE and have legal support for federal
investigations into allegations of sexual misconduct, that
McMahon had decided to pursue a deal with Endeavor before
the WWE began a strategic review process, that Khan
communicated with Emanuel in 2022 to facilitate the deal,
and that McMahon and Khan worked with their financial
adviser to steer negotiations toward Endeavor and away from
other potential bidders.
Terms of the settlement have not been released as the judge
still has to approve it.