In a lawsuit that was filed on Thursday in Delaware Chancery Court, Blackwells raises questions about whether ValueAct was compensated to support Disney in an ongoing proxy battle with activists. You can read the lawsuit here.
Prior to Wednesday’s annual shareholder meeting, when the votes in the board elections will be formally counted, Blackwells and Trian Fund Management have pushed for new representation on Disney’s board of directors.
To find out if there has been any misconduct, mismanagement, or breaches of fiduciary duty—including possible violations of disclosure requirements under federal securities laws—the lawsuit seeks “books and records.”. Furthermore, according to Blackwells, Disney omitted to reveal that ValueAct oversaw Disney pension funds from 2013 to 23 when announcing ValueAct’s backing.
The Blackwells’ complaint stems from a January 3 announcement made by Disney (RELATED: Disney And Ron DeSantis Allies Reach Settlement Over Theme Park District As Mouse House Board Battle Looms).
It highlighted ValueAct’s backing of the company’s management and nominees for the board.
The business promised to “provide information to the investment firm and consult with ValueAct on strategic matters, including through meetings with the Disney Board and management” in exchange. A Disney representative referred to the lawsuit’s allegations as “baseless” and said that the complaint was just their frantic attempt to draw attention to their list of prospective directors. The representative continued, saying, “ValueAct was not managing any Disney pension plan funds at the time they entered into an information-sharing agreement with the company, nor are any Disney pension plan funds currently invested with them.
Disney offered to meet with Blackwells and provide documentation verifying those facts prior to Blackwells filing this lawsuit, but Blackwells turned down the invitation. RELATED: Former CEO Michael Eisner Backs Bob Iger And Disney In Proxy Battle The legal dispute arose after Blackwells openly supported Bob Iger, the company’s chairman and CEO, and the official slate of board nominees on the same day as the ValueAct agreement was reached in January.
Though it has put forth three alternative candidates for the board, Blackwells has saved most of its ire for Trian and its leader, Nelson Peltz, in contrast to Trian, which has sparred with Disney and broadcast its criticisms on a regular basis.
Tens of millions of dollars have been spent by Trian and Disney to advance their opposing viewpoints, and shareholders have already started to cast their votes for board candidates. RELATED: Leading Proxy Advisory Firm Backs Nelson Peltz For Board, Citing “Critically Flawed Succession Process”.
Regardless of the result, it will probably be remembered as the most significant Disney shareholder meeting in twenty years when the votes are tallied the following week.
The deadline for investors is 11:59 p.m. M.
Voting will begin at 2:00 PM ET on Tuesday, and the results will be made public during the virtual meeting that will be broadcast live on Disney’s investor relations website.
Due to what it perceives as an unsuitably close relationship between Disney and another shareholder, ValueAct Capital, activist investor Blackwells Capital is suing the media behemoth.
Blackwells raises questions regarding whether ValueAct was paid to support Disney in an ongoing proxy battle with activists in the lawsuit that was filed on Thursday in Delaware Chancery Court (you can read it here). In the run-up to Wednesday’s annual shareholder meeting, which will officially see the tallying of board election votes, Blackwells and Trian Fund Management have been pushing for new representation on Disney’s board of directors.
In order to investigate potential instances of misconduct, mismanagement, or fiduciary duty breaches—including possible breaches of disclosure obligations under federal securities laws—the lawsuit seeks “books and records.”. Blackwells further asserts that Disney failed to reveal ValueAct’s management of Disney pension funds from 2013 to 23 when announcing ValueAct’s support.
Related: As the battle for the Mouse House Board looms, Disney and Ron DeSantis’ allies reach a settlement over the theme park district.
The Disney announcement from January 3 is the source of the Blackwells’ complaint. It highlighted ValueAct’s backing of the management and nominees for the company’s board. “Provide information to the investment firm and consult with ValueAct on strategic matters, including through meetings with the Disney Board and management,” the company stated in exchange. “.
The allegations in the lawsuit, according to a Disney representative, are “baseless,” and the complaint is just “their desperate attempt to gain attention for their slate of director candidates.”. The representative continued, saying, “ValueAct was not managing any Disney pension plan funds at the time they entered into an information-sharing agreement with the company, and no Disney pension plan funds are currently invested with them. Disney offered to meet with Blackwells and provide documentation verifying those facts prior to Blackwells filing this lawsuit, but Blackwells turned down the invitation. “.
RELATED: Former CEO Michael Eisner Strikes Back Against Bob Iger And Disney In Proxy Battle.
Blackwells publicly supported Chairman and CEO Bob Iger and the official slate of board nominees on the same day as the ValueAct agreement last January, which led to the current legal dispute. Though it has put forth three alternative candidates for the board, Blackwells has saved most of its ire for Trian and its leader, Nelson Peltz, in contrast to Trian, which has sparred with Disney and broadcast its criticisms on a regular basis.
RELATED: Leading Proxy Advisory Firm Supports Nelson Peltz for Board, Citing “Critically Flawed Succession Process” in a Blow To Disney.
Having spent tens of millions of dollars promoting their opposing viewpoints, Trian and Disney have encouraged shareholders to start voting for board candidates already. Regardless of the result, it will probably be remembered as the most significant Disney shareholder meeting in 20 years when the votes are tallied next week.
The deadline for investors is 11:59 p.m. m. EST on Tuesday to cast their votes. The meeting will take place virtually and be broadcast live on Disney’s investor relations website. The results will be disclosed during the meeting.
