Blackwells Has Sued Disney Just Days Before Company’s Annual Meeting
With less than a week to go until The Walt Disney Company’s annual meeting, the proxy battle between Blackwell Capital and Disney is heating up.
Blackwells is now suing the Mouse House over Disney’s information-sharing pact with hedge fund ValueAct Capital.
As part of the suit, Blackwells wants to inspect books and records to “investigate its credible suspicion of wrongdoing regarding Disney’s dealings and disclosures related to ValueAct.”
“Shareholders are entitled to full disclosure about the ValueAct relationship including, among other things, all fees to it by Disney in the 10-year period leading up to ValueAct’s endorsement of the Board,” a Blackwells spokesperson said.
As Blackwells vies for three seats on the Disney board, it is now publically questioning the propriety of the company’s relationship with ValueACT.
Disney Calls The Lawsuit “Baseless”
For their part, Disney has called Blackwell’s accusations of any wrongdoing “baseless” and said that the lawsuit is a “desperate attempt to gain attention for their slate of director candidates.”
“No Disney pension plan funds are currently invested with ValueAct nor were they managing any Disney pension plan funds at the time of their entering into an information-sharing agreement with the company,” Disney said.
Additionally, the company stated that it has offered to meet with Blackwells “to provide documentation confirming those facts, but Blackwells declined the meeting.”
Disney Had Fully Withdrawn Money Form ValueAct Before Agreement
According to Reuters, Disney had fully withdrawn the money it had invested with ValueAct, and the firm no longer managed money for Disney when ValueAct built its stake in Disney last year.
The later information-sharing agreement and ValueAct’s chief investment officer, Mason Mortif’s endorsement of Bob Iger, and the Disney board are then separate business dealings.
As part of its own endorsement of Iger and Disney, proxy advisory firm ISS wrote last week that ValueAct “also indicated that although its investment team met with Bob Iger on very limited occasions in the years prior to its investment in Disney, Mason Morfit and Bob Iger do not have a personal relationship.”
This lawsuit is especially noteworthy, however, because unlike Nelson Peltz and Trian, Blackwells has traditionally supported Iger and the Disney board. With just days until Disney’s annual meeting, however, the gloves are coming off, and the proxy battle is heating up.
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