WWE-UFC Merger Suit in Delaware Will Be Led by Ohio Pension Fund

An Ohio pension fund whose attorneys have “superior” experience litigating cases involving sexual misconduct will lead consolidated litigation challenging World Wrestling Entertainment Inc.‘s $21.4 billion merger with mixed martial arts giant Ultimate Fighting Championship, a Delaware judge ruled Thursday.

The fund “picked the defendants strategically and only brought the claims they believe are the strongest,” said Vice Chancellor J. Travis Laster in an order for the Delaware Chancery Court. He also noted that the fund holds a greater stake in WWE than a competing Michigan pension fund.

Laster chose investor Dennis Palkon and the Laborers’ District Council and Contractors’ Pension Fund of Ohio to the lead the lawsuit over a similar complaint from the City of Pontiac Reestablished General Employees’ Retirement System. Both plaintiffs alleged that Vince McMahon and other WWE senior leaders orchestrated an unfair merger with the league owned by Endeavor Group Holdings Inc. that secured multiple personal benefits for McMahon.

The merger followed McMahon’s return to the WWE in the wake of allegations that he sexually harassed and abused female subordinates for decades. Shareholders agreed to drop a lawsuit in May 2023 after McMahon agreed to repay $17.4 million that the WWE spent investigating those allegations. McMahon resigned as executive chairman of TKO Group Holdings, the parent company of UFC and WWE, in January 2024, after another sexual misconduct allegation was made against him.

Palkon and the Ohio fund are represented by Block & Leviton and Bernstein Litowitz. Their attorneys argued July 30 that a women-led legal team with experience litigating cases involving sexual misconduct should take the lead in challenging the merger.

“One of the issues in this case involves allegations of sexual misconduct,” Laster wrote, adding the Ohio fund’s attorneys have “superior experience litigating sexual assault-related cases, including working with (and on behalf of) survivors of sexual misconduct.”

At the time of the merger, Palkon owned 7,162 shares of WWE—about 8.2% of his portfolio—an investment made in honor of his father, with whom he used to watch wrestling matches, according to a brief. The Ohio pension fund owned 5,669 shares. Pontiac held 1,354 shares, according to its own application brief.

The case is In re World Wrestling Ent. Inc. Merger Litig., Del. Ch., No. 2023-1166, order 8/8/24.