WWE Faces New Suit Over ‘Horrifying’ Vince McMahon Allegations

An investor sued WWE Inc. for more information about “horrifying allegations” against chairman Vince McMahon, saying he hopes to bar McMahon from the board of a company he has led for most of the past four decades.

The lawsuit seeks internal files from WWE to investigate claims that McMahon “raped and sexually assaulted employees and contractors over the course of decades,” then paid nearly $15 million to keep a lid on the accusations. The company didn’t immediately respond to a request for comment Wednesday.

“There are serious questions about how Vince McMahon obtained and delivered those funds to his victims,” according to the complaint made public Tuesday in Delaware’s Chancery Court. The suit also cites fears that McMahon’s comeback in January—when he staged a board “coup” after being forced out in July 2022—showed “a flagrant disregard for basic corporate governance norms.”

Believing “that the rules do not apply to him, Vince McMahon removed three independent directors and re-appointed himself, as well as two of his longtime cronies,” the suit says. “The apparent misconduct here is both myriad and extremely serious.”

Board Coup

The complaint is the latest by a shareholder challenging McMahon’s surprise return from a six-month exile that began when the board asked him to resign over the harassment and hush money allegations. The move reinstalled McMahon as the head of a WWE royal family that includes his daughter, Stephanie—who stepped down as chairman and co-CEO in early January—and son-in-law, the former wrestler Paul “Triple H” Levesque.

Two of the other cases focus on claims that McMahon violated legal technicalities when he unilaterally made certain bylaw amendments that would have seized power from the board. After he rescinded the changes, the investors behind those suits—including a police pension fund—now want permission to drop their claims and seek a “mootness fee” for their role in forcing McMahon’s hand.

A third shareholder, meanwhile, is pressing broader claims directly involving the sexual harassment allegations. That suit accuses McMahon of breaching his fiduciary duties by harassing employees and paying to cover it up, as well as through his return to the helm.

‘McMahon’s Thuggery’

The new complaint is the first of the suits to seek documents from WWE under a state law giving corporate investors broad inspection rights. Records cases, which often reflect an attempt to drum up fiduciary breach allegations, are typically brought before substantive cases alleging outright wrongdoing.

But the suit echoes the most serious claims against McMahon, saying he “appears to have leveraged his position to prey on his subordinates to appease his sexual desires.” He then exploited his control over the company to override the board’s judgment that he was unfit to lead it, according to the complaint.

If the disclosure of records does lead to fiduciary breach claims, “plaintiff intends to achieve what the board wanted to, but could not in light of Vince McMahon’s thuggery,” by initiating proceedings “to bar Vince McMahon from ever serving on the WWE board again,” the suit says.

It was originally filed under seal Jan. 26.

Cause of Action: Section 220 of the Delaware General Corporation Law.

Relief: Disclosure of relevant company files; costs and fees.

Attorneys: The investor, Dennis Palkon, is represented by Bernstein Litowitz Berger & Grossmann LLP, Robbins LLP, and Richard A. Maniskas of Berwyn, Pa.

The case is Palkon v. World Wrestling Ent. Inc., Del. Ch., No. 2023-0087, complaint unsealed 1/31/23.