Settlement Agreed To In Principle In WWE Shareholder Lawsuit Over TKO Merger

An agreement in principle on a settlement has been reached in the WWE shareholder lawsuit over the company's merger with the Endeavor-owned UFC under TKO Group Holdings that was completed in September 2023.

The case was set to go to trial at the Delaware Court of Chancery on Monday, June 8 and continue until Friday, June 12 before Vice Chancellor J. Travis Laster, but the trial was removed from the Delaware court calendar on June 5 and it emerged that it had been cancelled on Saturday. Brandon Thurston of POST Wrestling has now reported that the judge has issued a notice stating an agreement in principle for a settlement has been reached.

Laster wrote: "The parties have represented to the court that they have reached an agreement in principle on a settlement. At the parties' request, the trial is cancelled. The parties have advised the court that they will present the settlement for approval in due course."

The lawsuit filed by WWE shareholders in November 2023 against Vince McMahon, Nick Khan, Paul "Triple H" Levesque, George Barrios, and Michelle Wilson alleged that Vince McMahon preselected Endeavor for a WWE merger as Ari Emanuel, Endeavor's CEO and now TKO CEO, assured McMahon's future with the company following McMahon's brief 2022 retirement due to a sexual misconduct and hush money scandal. It is alleged this meant competing offers from Liberty Media and private equity firm KKR were not allowed to develop which prevented a competitive process from emerging over the sale of WWE. According to the lawsuit, this resulted in WWE shareholders being shortchanged, and the plaintiffs were seeking damages of between $446 million and $949 million.

The agreement in principle of a settlement comes after the trial was made more difficult for the defendants when Vince McMahon and Nick Khan were sanctioned by Vice Chancellor Laster for destroying evidence. As part of the decision, five facts were considered to be presumptively true which shifted the burden to the defendants to disprove the five facts, as opposed to the plaintiffs having to prove the allegations. It was also decided by Laster that the defendants needed to produce "clear and convincing evidence" to disprove the presumptive facts, a higher standard than the usual "preponderance of the evidence" for civil lawsuits. 

The five presumptive facts were as follows: 

• Emanuel's promise to provide Vince with a continued role at any post-merger company after a transaction influenced Vince’s decision-making with respect to the merger.
• Emanuel’s offer of indemnification and other legal support related to pending federal investigations of Vince’s alleged misconduct influenced Vince’s decision-making with respect to the merger.
• Vince decided to pursue a transaction with Endeavor in 2022, before the Company initiated the strategic review process.
• Khan communicated with Emanuel between August and December 2022 to facilitate a transaction between WWE and Endeavor.
• Vince and Khan worked with Raine to steer the process toward a deal with Endeavor and away from other potential bidders.