Vince McMahon is facing investor litigation over claims that he pushed aside the WWE Board of Directors by illegally installing himself as chairman.
McMahon previously resigned from the company last July as chairman and CEO in the face of allegations that he had paid $12 million over several years to keep quiet sexual harassment accusations by several women.
As previously reported, McMahon told the Board of Directors in late December that he wouldn’t approve any potential sale of the company nor the media rights deals if he wasn’t brought back to the Board. In a response, the Board unanimously voted that they didn’t want McMahon to return.
Following the news of Stephanie McMahon resigning from WWE on Tuesday as Chairwoman and co-CEO, Vince was named executive chairman of the Board, while Nick Khan is the CEO.
According to court documents obtained by Bloomberg Law, Scott A. Fellows, a WWE shareholder, filed a lawsuit against McMahon in Delaware’s Chancery Court, accusing him of using his 81% voting control to oust three board members to bring himself, George Barrios, and Michelle Wilson back to the Board by making bylaw changes that would “impose his will on the board and WWE.”
The lawsuit noted McMahon timed his return to seize control of upcoming negotiations over the company’s TV deals and forced his way back by leveraging a threat to withhold support for any deal reached without his participation.
The lawsuit notes that to “take complete personal control over any major corporate decision” by “adding his cronies to the board” violates Delaware law.
Fellows wants an invalidation of the bylaw changes made and his legal costs paid for from this lawsuit.
