Read the follow up to this report published on May 7, 2025:
A shareholder class action lawsuit filed against WWE originally in November 2023 continues to develop. The consolidated case alleges that Vince McMahon manipulated the sale process that led to the TKO merger with Endeavor, for his personal benefit, preventing shareholders from getting a better deal.
The first lawsuit has been public for some time, but recent filings — including a second complaint raised in April 2024 — related to the case reviewed for the first time here by Wrestlenomics provides new insight on the status of the litigation. The case is with the Delaware Court of Chancery, where public filings are difficult to obtain.
Read the full text of both complaints here.
The plaintiffs in the combined case now include pension funds from Ohio and Pontiac, Michigan, as well as Dennis Palkon, a university professor who has been prominently involved in previous shareholder class actions against WWE and other publicly-traded companies. The judge, Travis Laster ruled in August 2024 that the Palkon group is the lead plaintiff in the consolidated lawsuit.
Like many major corporations, WWE is incorporated in Delaware. According to their filings, the plaintiffs made a legal demand under a Delaware General Corporation Law which allows stockholders to inspect a company’s records for a “proper purpose”. That’s how the plaintiffs obtained copies of WWE’s Board of Directors’ meeting minutes, which they say reveal details of the company’s decision-making process as scandal around McMahon and the later merger process unfolded.
The minutes are referred to by the plaintiffs and are not provided in full in the public filings, and many parts of the filings are redacted. However, according to what the plaintiffs have made public, certain Board members, who included at least independent directors Man Jit Singh and Ignace Lahoud, attempted to resign the day after the Wall Street Journal’s initial report in June 2022 about McMahon’s nondisclosure payments related to sexual misconduct allegations.
However, the plaintiffs say Stephanie McMahon — who was still a Board member at the time, amid her temporary leave from her executive role which she announced the previous May — persuaded Board members to stay, leaving multiple voicemails and sent emails to other directors.
Two days after the Journal broke the story about the NDA payments, Vince McMahon resigned on an interim basis. Stephanie McMahon was appointed interim WWE CEO and Chair.
It’s worth noting that in the weeks ahead, Board members Connor Schell (on July 6, 2022), Erika (Nardini) Ayers Badan (on September 15, 2022) did resign from the Board. It’s unclear to what degree the scandal that emerged around McMahon weighed into those decisions, and the public versions of these complaints at least don’t offer claims about that. WWE’s contemporaneous filings claimed Schell left the board to focus on another project. Filings for both Schell and Nardini’s resignations claimed their decisions to resign were “not due to any dispute or disagreement with the Company, its management or any matter relating to the Company’s operations, policies or practices.”
Additionally, Singh and Lahoud actually did resign on January 6, 2023, soon after McMahon forced his return to the company, despite the Board’s unanimous opposition the prior month.
The plaintiffs’ complaint again cites Board minutes. “While [Singh and Lahoud] agreed with the Board’s decision to explore the Company’s strategic alternatives, they did not agree with Mr. McMahon’s return at this time.”
Then on January 9, 2023, the plaintiffs claim Board minutes state that the meeting held that day “had two purposes. [1], [f]or Mr. McMahon to review, and the Board to approve, his appointment as Executive Chair and the scope of his activities in that capacity and [2], to appoint members to standing Board committees.”
The Board approved McMahon as Executive Chairman. The complaint goes on to state that directors Nick Khan, Paul Levesque, and Steve Koonin “reversed course” and voted to approve McMahon as Chair, contrary to the Board’s unanimous statement to McMahon in a letter on December 27, 2022, stating that he should not return. Steve Pamon didn’t attend the meeting, the complaint says, relying on the Board’s minutes. Another Board member, Michelle McKenna, abstained from the vote to approve McMahon.
Reasons for Stephanie McMahon’s permanent resignation from all roles at WWE the following day aren’t made any clearer from what we already know. The plaintiffs also don’t state whether she participated in the vote that placed her father back on the Board.
In a statement upon her resignation, Stephanie McMahon didn’t express any disapproval of Vince McMahon or the company’s direction. “WWE is in such a strong position, that I have decided to return to my leave and take it one step further with my official resignation,” she wrote on January 10, 2023.
The Delaware court filings from the shareholders also claim the Board’s investigation into McMahon’s conduct was a “sham”.
The Pontiac shareholders’ complaint, which was filed in April 29, 2024 and reviewed in recent days for the first time by Wrestlenomics, alleges:
“During McMahon’s brief hiatus, the Special Committee (including Defendants [then-WWE Board members Steve] Koonin and [Steve] Pamon) conducted a sham investigation of the allegations against McMahon. The Special Committee facilitated the cover-up by ensuring that they received no written materials throughout the entirety of that committee’s existence. The Special 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.”
In its public filings, WWE claimed that its Special Committee investigation was “substantially complete” by the time of the quarterly report filed on August 15, 2022.
The plaintiffs further allege:
“Special Committee minutes show that just the day prior, August 14, 2022, the Special Committee ‘reviewed and considered next steps in the investigation.’ The minutes say nothing about an investigation about to wrap up. Even after the [quarterly report] was filed, the Special Committee continued to meet. On August 23, 2022, the Special Committee’s counsel brought up ‘new developments’ and discussed ‘potential next steps.'”
Rather than issuing a final report, the Special Committee allegedly “simply transferred its investigation over to multiple different Board committees”.
The plaintiffs argue that WWE misled shareholders by claiming that the investigation was nearing completion when, allegedly, it had actually been stalled and ultimately buried.
“On October 27, 2022, the full Board held a meeting, wherein the Special Committee disbanded and the Board transferred the investigation pursuant to the ‘Recommendations of the Special Committee,'” the plaintiffs stated further, with more details redacted.
The plaintiffs also raise allegations about the sale process, which was central to McMahon’s justification for returning to the company as Executive Chairman. Plaintiffs allege that McMahon and WWE executives worked to ensure that only Endeavor was allowed to genuinely bid for WWE. The process was predetermined, it’s alleged, for McMahon and his longtime friend, Endeavor CEO Ari Emanuel, to make the deal that led to the formation of TKO.
While other bidders — whose identities are obscured behind redactions — were allegedly willing to cash out all WWE investors, the Board purportedly pushed for the deal with Endeavor because it guaranteed that McMahon would continue to have a role with the company. The shareholders claim that resulted in WWE being undervalued.
Additionally, the plaintiffs focus on WWE’s multimillion-dollar payouts to executives who were also Board members during the merger process: Nick Khan, Paul Levesque, and Frank Riddick. Khan received a $15 million bonus and Levesque and Riddick each got $5 million for completing the deal. Those payouts weren’t a secret; they were disclosed in 2023 by WWE in SEC filings. The plaintiffs contend, though, that WWE’s leadership structured the deal to benefit themselves above the company’s shareholders.
Numerous parties have been subpoenaed for documents and testimony related to this case. That includes Board members, but also law firms and banks involved with the merger process, J.P. Morgan, Moelis, Paul Weiss and Kirkland & Ellis.
All four of the aforementioned firms have been asked to provide information about dozens of parties, but one interesting party that the plaintiffs want information about is the Abu Dhabi Investment Authority (ADIA). It’s unclear how the ADIA might be connected to the subject matter of the case, but it’s possible to imagine the sovereign wealth fund owned by the United Arab Emirates might’ve had interest in bidding on WWE.
Liberty Media Corporation has also been subpoenaed. Liberty, which is the parent of companies like Formula One and Sirius XM, fits the description of the anonymized “Strategic Party 1”, which bid on WWE, according to WWE’s own filed narrative about the merger process. WWE referred to the party as being headquartered in Englewood, Colorado, consistent with the location of Liberty’s main offices.
Also subpoenaed was Vestry Laight, the firm that specializes in sexual misconduct investigations. WWE brought the firm in to assist with the Board’s investigation of allegations against McMahon and the company culture.