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On 12/26, a lawsuit was filed in Delaware Chancery Court by the Oklahoma firefighters pension fund, which owns shares of World Wrestling Entertainment Inc.
According to Bloomberg Law, the stockholder claims there is “a credible basis to believe” that Vince McMahon and other senior WWE executives have breached their duties to investors by diverting resources for the XFL.
The suit also claims that company board members have failed to ensure Vince McMahon didn’t engage in transactions that conflict with WWE interests.
The stockholder is seeking access to internal records that detail WWE’s involvement with XFL.
When Vince McMahon initially announced the XFL he made it clear that no crossover would be made between WWE and the football league.
“There will be no crossover whatsoever in terms of talent or anything like that from WWE to the new XFL,” McMahon said during a press conference in January 2018.
On March 27, 2019, McMahon sold 3,204,472 shares of WWE stock to primarily fund his other company, Alpha Entertainment based on SEC filings.
On March 27, 2019, Vincent K. McMahon (“Mr. McMahon”), Chairman and Chief Executive Officer of World Wrestling Entertainment, Inc. (the “Company”), sold 3,204,427 shares of the Company’s Class A common stock in a block trade made in accordance with the provisions of Rule 144 of the Securities Act of 1933, as amended.Mr. McMahon executed the sale primarily to fund a separate entity from the Company, Alpha Entertainment LLC “Alpha”), which Mr. McMahon established to explore investment opportunities across the sports and entertainment landscapes, including launching a professional football league under the name “XFL”. Alpha has announced that this launch will occur in early 2020.Mr. McMahon has informed the Company that he has no current plan to sell additional shares of the Company’s stock and that he intends to continue in his capacity as the Company’s Chairman and Chief Executive Officer for the foreseeable future.The shares sold by Mr. McMahon represent approximately 4.1% of the Company’s total outstanding shares of Class A and Class B common stock. After the sale, Mr. McMahon beneficially owns 28,682,948 shares of the Company’s Class B common stock, which represents approximately 80.1% of the Company’s total voting power and approximately 36.8% of the Company’s total outstanding shares of common stock. Please credit Heel By Nature if using any quotes.
Vince McMahon sold $100 Million worth of WWE stock in December 2017 when he initially had plans to launch XFL.
More details on the lawsuit will be made once further documents have been obtained.