Amidst a battle with Walt Disney Co., Blackwells Capital LLC recently filed a suit in the Delaware Court.
The favour seeks documents relating to Disney’s dealings with hedge fund ValueAct Capital Management and allegations of misleading information being revealed. Blackwells Capital asserted that before Disney’s director candidates were backed by ValueAct, Blackwells Capital was not aware of these ties between the parties.
The lawsuit’s main focus is clear. Any violations of disclosure rules and unlawful behaviour in Disney’s activity around ValueAct must be exposed.
Blackwells’ accusations
Blackwells Capital accuses Disney of withholding information about the Value Act and making up to $95 million payments for its pension fund assets management from 2013 to 2022.
Disney, on the other hand, refutes such claims as objectless and sour grapes. In reference to this, the company mentions that ValueAct does not hold Disney pension plan funds and that those funds were no longer in the management of ValueAct.
It also informed them they are ready to give all the necessary documentation in proving their claims, but the Blackwells Capital did not accept the offer.
Blackwells Capital and Trian Fund Management (Nelson Peltz’s activist investment fund) lead a proxy battle with Disney. They are asking for board seats which are in dispute with their entertainment company. Notably, Disney’s group of contenders have the support of ValueAct and its CEO, Mason Morfit. Blackwells Capital and Trian Fund Management have castigated Bob Iger, the Disney CEO, for some failures in the management of the company and brought up a strategy problem in Disney.
Disney and ValueAct have signed a business-collaboration agreement in early January. Among other measures, the agreement described ValueAct’s commitment to backing Disney’s nominees.
Disney believed closely teamwork and cooperation with ValueAct companies will foster. On the other hand, the lawsuit by Blackwells Capital casts doubt on the disclosure and the ties between Disney and ValueAct. This complaint requests production of corporate document and record to investigate any misbehaviour by Disney within the scope of their dealings with ValueAct.
Blackwells Capital LLC has brought against Disney a lawsuit implying a lack of disclosure and financial links between ValueAct Capital Management. Disney has negated these accusations and has called them baseless. The current situation between Blackwells Capital, Trian Fund Management, and Disney is the latest example of the heated nature of corporate governance and board elections. Shareholders are being given an exciting new opportunity to vote on board nominees and even influence the trajectory of the leading entertainment company.
