WWE Inc. chief Vince McMahon—who returned to the company in early January after resigning amid a wave of sexual harassment allegations—is facing investor litigation over claims that he pushed aside the board to illegally install himself as chairman.
A shareholder sued McMahon in Delaware’s Chancery Court, accusing him of wielding his 81% voting control to oust three board members, replace them with loyalists, and push through bylaw changes that would “impose his will on the board and WWE.”
A spokesperson for McMahon and WWE didn’t immediately respond to a request for comment Wednesday.
The dispute Tuesday comes about six months after McMahon stepped down as chairman and CEO in the face of allegations that he had paid $12 million over more than 15 years to keep a lid on sexual harassment accusations by women both within and outside the company.
McMahon’s recent moves have reinserted him as the head of a WWE royal family he spent decades leading, both behind the scenes and on screen. His daughter, Stephanie McMahon, who resigned as co-CEO and chairwoman Tuesday, is married to another top executive, former WWE champion Paul “Triple H” Levesque.
According to the proposed class action, McMahon timed his return to seize control of upcoming negotiations over the company’s expiring media rights, the “lifeblood” of the business, and forced his way back by leveraging a threat to withhold support for any deal reached without his participation.
But the move to “take complete personal control over any major corporate decision” by “adding his cronies to the board” violates Delaware law, the suit says.
Causes of Action: Section 141 of the Delaware General Corporation Law; breach of fiduciary duty.
Relief: Invalidation of the bylaw changes; costs and fees.
Potential Class Size: Thousands of holders of 43.3 million WWE shares, according to the complaint.
Attorneys: The investor leading the case, Scott Fellows, is represented by Labaton Sucharow LLP, Friedlander & Gorris PA, Friedman Oster & Tejtel PLLC, and Kaskela Law LLC.
The case is Fellows v. McMahon, Del. Ch., No. 2023-0022, complaint filed 1/10/23.