Take-Two is apparently the object of a class-action suit by one of its alleged shareholders who claims, basically, that the circumstances surrounding Take-Two's refusal to sell to Electronic Arts are so fiscally irresponsible it's criminal.
Yesterday, we discussed the strategies Take-Two undertook to try and stall or thwart EA's bid. They've been refusing to talk with EA or explore offers, and they're doing their best to entrench the current Board of Directors with that compensation boost that features stock that takes three years to fully vest. They also implemented that stockholder's rights plan — the so-called "poison pill." As it turns out, someone who is allegedly one of Take-Two's stockholders is none too happy with these tactics — and he's ticked enough that he's taking the company to court.
Take-Two disclosed this morning in a filing to the SEC that the alleged stockholder, one Michael Maulano, filed a class action complaint on April 11th against Take-Two and it's eight-member directorial board in the Supreme Court of the State of New York, where the company's headquartered. Maulano calls Take-Two's tactics a breach of fiduciary duty, and the suit also alleges that Take-Two's responses to EA's offer contained "misleading and incomplete" information.
Maulano wants "declaratory relief, preliminary and permanent injunctive relief, damages, and reasonable attorneys' fees and litigation expenses," and it is unclear how many other shareholders, if any, are part of Maulano's class action suit. Take-Two was not immediately available for comment on the suit, but said in its disclosure: "The Company and its Board of Directors believe these claims lack merit, and intend vigorously to defend against them."
This is a different lawsuit from one filed last month by Prickett, Jones & Elliott on behalf of Take-Two shareholder Patrick Solomon. Solomon aims to sue Take-Two management over the controversial compensation boost.
Bonus info: Why take Take-Two to court rather than simply make a proposal for a vote in the annual meeting? As we learned yesterday, only shareholders who bought Take-Two stock before the cut-off deadline can submit proposals or vote at the meeting — and those that bought stock after EA's bid aren't eligible to vote. It's unclear how long Maulano has been a shareholder, but even if he is one of those able to vote, it may be that there wouldn't be enough people on his side of things at tonight's meeting.
Later this evening — 6:00 PM Eastern Time, to be exact — Take-Two will hold its annual meeting for investors. When Kotaku spoke to some analysts yesterday to help lay out exactly what's been going on regarding EA's aggressive bid to buy the company, and we learned that today might turn out be a very big day for progress in that arena.
EA also revealed this morning that the Federal Trade Commission has filed a second request for information on the proposed transaction, so that it can investigate possible anti-competition issues — though the FTC has drawn no conclusions yet, and requires more time to investigate.
We'll follow this story as it develops throughout the day and keep you posted.