Hedge Fund Sues Disney Amid Ongoing Boardroom Battle

Blackwells Capital Sues Disney Amid Ongoing Boardroom Battle | Enterprise Wired

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Source- The Financial Express

Blackwells Capital intensified its campaign against Walt Disney (DIS.N) by filing a lawsuit against the entertainment giant on Thursday. The legal action represents the latest development in a protracted struggle over board membership and governance within the iconic company.

Allegations and Counterclaims

In the lawsuit lodged in a Delaware court, Blackwells alleges potential disclosure violations in Disney’s dealings with hedge fund ValueAct Capital. This move amplifies the pressure on Disney as it navigates a battle over board representation and strategic direction. Disney swiftly dismissed the claims as “baseless,” characterizing the lawsuit as a desperate ploy to draw attention to Blackwells’ slate of director nominees.

Boardroom Showdown

Blackwells, alongside fellow hedge fund Trian Fund Management, seeks to sway investor sentiment in favor of its proposed director candidates. Meanwhile, Disney is staunchly supporting its own slate of directors ahead of the upcoming annual shareholders meeting. The clash underscores divergent visions for Disney’s future and underscores the significance of board composition in shaping the company’s trajectory.

Focus on the Disney-ValueAct Relationship

At the heart of Blackwells’ lawsuit lies Disney’s association with ValueAct Capital and a recent information-sharing agreement between the two entities. Blackwells Capital aims to delve into Disney’s dealings and disclosures regarding ValueAct, citing concerns of potential impropriety. Disney contends that it has severed financial ties with ValueAct, indicating that the fund no longer manages any funds for the entertainment giant.

Disclosure Demands

Blackwells insists on transparency regarding Disney’s relationship with ValueAct, including a comprehensive breakdown of fees paid to ValueAct over the past decade. This demand for disclosure underscores shareholders’ rights to clarity and accountability in corporate governance matters. While Disney asserts its willingness to provide documentation affirming its position, Blackwells Capital reportedly declined a meeting to discuss the matter further.

The ongoing legal tussle underscores the stakes involved as both sides vie for control over Disney’s board. With shareholder interests and corporate governance principles at the forefront, the outcome of this battle could significantly influence Disney’s strategic direction in the years to come.

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