Vince McMahon’s Costs From Recent Lawsuit Revealed
Vince McMahon is no stranger to controversy or a legal battle and a recent lawsuit cost the WWE’s Executive Chairman a pretty penny.
Vince McMahon forced his way back onto the WWE Board of Directors in early 2023 before being appointed Executive Chairman of the company and consolidating his power by changing several of the company’s bylaws.
That rubbed some shareholders the wrong way and lawsuits were filed claiming that McMahon had breached his fiduciary duties as a result:
“Breached his fiduciary duties and violated Section 141(a) of the General Corporation Law of the State of Delaware and the Company’s certificate of incorporation by executing a written consent in January 2023 to amend certain Company bylaws to allegedly restrict the power of the Company’s board of directors.”
When McMahon moved to scrap those bylaw changes, the lawsuit was scrapped but in a new SEC filing made by WWE, it was revealed that the suit still cost McMahon $1.65 million in legal fees for the plaintiffs:
“On January 10, 2023, a stockholder of World Wrestling Entertainment, Inc. (the “Company”), Scott A. Fellows, filed a direct class action against Vincent McMahon in the matter styled Fellows v. McMahon, C.A. No. 2023-0022-JTL (Del. Ch.) in the Delaware Court of Chancery (the “Court”).
“The lawsuit alleged that McMahon breached his fiduciary duties and violated Section 141(a) of the General Corporation Law of the State of Delaware and the Company’s certificate of incorporation by executing a written consent in January 2023 to amend certain Company bylaws to allegedly restrict the power of the Company’s board of directors.
“On January 12, 2023, another Company stockholder, Police & Fire Retirement System of the City of Detroit, filed a direct class action against McMahon and named the Company as a nominal defendant, which made substantially the same allegations as in the Fellows action. These two actions were subsequently consolidated.
“Following discussions among counsel for the plaintiffs and McMahon, McMahon agreed to repeal the challenged January 2023 bylaw amendments by written consent, which McMahon executed on January 16, 2023. On January 23, 2023, the plaintiffs filed a motion that, among other things, sought dismissal of the consolidated action as moot, with the Court reserving jurisdiction solely for consideration of an application for attorneys’ fees and expenses. The Court granted that motion on January 25, 2023.
“In lieu of an application for attorneys’ fees and expenses and after engaging in arms’-length negotiations, McMahon agreed to make a payment to plaintiffs’ counsel in the amount of $1,650,000 in attorneys’ fees (inclusive of expenses). The Court has not been asked to review, and will pass no judgment on, the payment of a fee or its reasonableness.”
Vince McMahon will become Executive Chairman of the new parent company of WWE once the company’s takeover by Endeavor is complete, that new company’s name has now been revealed.