Take-Two has been sued by one of its shareholders who alleges the company "breached their fiduciary duties" by refusing to properly explore Electronic Arts' acquisition offer.
A Form 8-K Current Report, filed with the Securities and Exchange Commission on April 17, revealed that on April 11, an "alleged stockholder" named Michael Maulano filed a class-action suit against the company with the New York State Supreme Court. According to the filing, Maulano claims Take-Two's Board of Directors is in breach of its responsibilities for "refusing to explore premium offers by Electronic Arts (EA) to acquire all of the Company's shares, enacting a By-law amendment allegedly designed to entrench the current Board of Directors, approving an amendment to a management agreement with ZelnickMedia Corporation allegedly designed to entrench the Company's management, adopting the stockholders' rights plan allegedly to thwart EA's tender offer, and issuing a proxy statement and response to EA's offer that allegedly contained misleading and incomplete information."
Maulano's suit seeks "declaratory relief, preliminary and permanent injunctive relief, damages and reasonable attorney's fees and litigation expenses," the filing said. In response, the Take-Two Board of Directors said it believes the claims lack merit, and will defend itself vigorously against them.
The complaint did not seek to "enjoin or delay" the company's annual stockholders meeting, being held today (April 17) in New York City and available to the general public via live webcast (audio only). The meeting is expected to address and offer details about the current state of EA's attempted hostile takeover of Take-Two. Gamers interested in following the action live can do so via the Take-Two Investor Relations website.