Two New Class Action Lawsuits Filed Against WWE
According to the website Heel By Nature, WWE is facing another lawsuit. This one was filed by company shareholders Ryan Merholz and Melvyn Klein against Chairman Vince McMahon, and executives Stephanie McMahon, Triple H (aka Paul Levesque), Frank Riddick III, Stuart Goldfarb, Laureen Ong, Robyn Peterson, Man Jit Singh, Jeffery Speed, Alan Wexler, and former Co-President George Barrios.
The 44-page lawsuit was filed last week on April 24 and claims that the executives took actions without the best interests of the shareholders in mind. Among the claims that are made, it alleges that the top executives made “false statements” and failed “to disclose adverse facts known to them about” the promotion. Additionally, the lawsuit by Merholz and Klein alleged the following, making mention of the controversy surrounding WWE’s last trip to Saudi Arabia and the Saudi government holding WWE wrestlers “hostage” as part of a dispute with Vince McMahon:
“The Company’s most senior executives and directors took advantage of WWE’s inflated stock price to sell millions of dollars’ worth of their own WWE shares during this time period. In a single stock sale on March 27, 2019, WWE’s Chief Executive Officer (“CEO”) and Chairman of the Board, Defendant V. McMahon, sold more than 3.2 million WWE shares for over $261 million in proceeds. This sale occurred when there were only a few days left in the Company’s 2019 first quarter which insiders knew was experiencing poor financial performance and despite growing behind-the-scenes problems with the Saudis.”
“WWE held the Crown Jewel live event in Riyadh, Saudi Arabia. After the event ended, shocking news reports surfaced claiming that the Saudi government was effectively holding a number of WWE wrestlers “hostage” in retaliation for McMahon’s decision to delay a live broadcast of Crown Jewel until the Saudis made tens of millions of dollars in past due payments. Estimates for the amount outstanding ranged from $60 million to as much as $500 million. Several wrestlers detailed their experience during the ordeal on social media platforms”
This appears to be the latest in a number of lawsuits filed against WWE and/or Vince McMahon.
WWE has been hit with more class action lawsuits, one from the Gross Law Firm that claims WWE made “materially false and/or misleading statements and/or failing to disclose” that they perpetrated a fraudulent scheme.
Another from Kessler Topaz Meltzer & Check specifically mentioned the “tensions” between WWE and the Saudi government, centered around the Saudi government owing WWE millions of dollars.
“However, by at least early 2019, tensions in the relationship between WWE and the Saudi government had reached a breaking point. The Saudi government had refused to make millions of dollars in payments owed to WWE. Further, OSN was contemplating the early termination of its obligations under its broadcasting agreement (ultimately terminated in March 2019) and had rebuffed WWE’s efforts to renew the agreement. These developments threatened WWE’s ability to reach a renewed media agreement in 2019, which WWE told investors was critical to its expansion plans in the MENA region and its growth prospects. Moreover, WWE was facing withering consumer engagement in its traditional markets. Rather than disclose these adverse developments, the defendants represented that WWE had continued to bolster its relationship with Saudi Arabia and was making significant progress on the renewal of the critical media agreement and its business initiatives in the country.”
This follows the earlier class action suit (described below) that referenced WWE wrestlers being held “hostage” by the Saudi government as part of a dispute with Vince McMahon.