Amended Shareholder Lawsuit Questions WWE's Internal Investigation Into Vince McMahon

While WWE remains a defendant in both the Janel Grant and Ring Boy lawsuits, another legal matter may soon be taking up their attention after a class action shareholder lawsuit filed against WWE in Delaware has resurfaced. Among the claims in the amended suit are that former WWE Chairman Vince McMahon of "manipulating the sale process" of WWE's sale to Endeavor/TKO, in order to maintain a position of power within WWE, along with alleged details regarding the handling of McMahon by WWE's Board of Directors.

This includes the WWE Board's 2022 investigation of McMahon's hush money payments to cover up various allegations, which may be among the most explosive parts of the complaint. Wrestlenomics reports the amended suits describes WWE's investigation of McMahon as "a sham." The finger is pointed at Board members Steve Koonin and Steve Pamon, who are cited as the leaders of the Special Committee investigating McMahon.

The suit argues the Committee's investigation "facilitated the cover-up by ensuring that they received no written materials throughout the entirety of that committee's existence." They further claim the Committee "did not interview McMahon's victims, did not reprimand or otherwise censure McMahon, received no interview memoranda, reviewed no evidence, made no factual findings, and issued no report." 

Though WWE claimed in a public filing that the investigation was "substantially complete" during their August 15, 2022 quarterly filing, the suit alleges that minutes from Special Committee meetings show the investigation was still ongoing as of August 14, with no plans to end it. They further claim the committee continued to meet till October 27, when the Committee disbanded, and that WWE "misled shareholders by claiming that the investigation was nearing completion when it had actually been stalled and ultimately buried."

These claims all lead back to the lawsuit's main focus on WWE's merger with Endeavor/TKO, where the plaintiffs allege that "McMahon and WWE executives worked to ensure that only Endeavor was allowed to genuinely bid for WWE," and that the whole process was "predetermined" by McMahon and Endeavor CEO Ari Emanuel. The suit further cites payoffs to current and former WWE executives, including Nick Khan, Paul Levesque, and Frank Riddick, as proof that WWE execs were more concerned about structuring a deal that was beneficial to them, not shareholders, and that the deal ultimately undervalued WWE.

To that end, the plaintiffs have subpoenaed several parties for more information on other potential suitors WWE had, and WWE's investigation of McMahon. The subpoenaed parties include WWE Board members, banking companies J.P. Morgan and Moelis & Company, law firms Paul, Weiss and Kirkland & Ellis, Liberty Media Company, and Vestry Laight. Morgan, Moelis, Paul, Weis, an Kirkland & Ellis were all involved in the WWE/TKO merger, while Laight was the investigative firm brought in to assist the Committee in McMahon's investigation.

Though the names of potential bidders were redacted, further detail show the plaintiffs are seeking out information on the Abu Dhabi Investment Authority, suggesting they, along with Liberty, were potential suitors to purchase WWE. It was noted Liberty matches the description of "Strategic Party 1," an entity that WWE's own filings on their merger describes as making a bid for WWE. Like Liberty, "Strategic Party 1's" offices are located in Englewood, Colorado.