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The Blackwells group sued Walt Disney (NYSE: DIS) in the Delaware court, amplifying the company’s fight over Disney’s board just days before a critical shareholder vote.
Blackwells is one of two companies trying to get directors into Disney Board seats: Three candidates have been nominated for the board, as Nelson Peltz’s Trian Group seeks two seats.
The new litigation, a Section 220 complaint, seeks to force Disney to turn over documents related to its relationship with ValueAct Capital, an activist investor that has supported Disney board candidates.
Disney (DIS) has not adequately disclosed its financial ties to ValueAct, Blackwells says, and is pursuing action to inspect “its books and records to determine whether wrongdoing, mismanagement or breaches of fiduciary duty, including potential breaches of disclosure obligations under the federal securities laws have occurred,” according to the complaint.
“Disney’s proxy contest is about governance for the future,” Blackwells said in a statement.
“Blackwells has consistently demonstrated that it is seeking to offer shareholders an alternative, primarily to Nelson Peltz. However, Disney’s current board of directors has not done itself any favors by publicizing the ValueAct deal in hopes of influencing shareholders shareholders. Shareholders are entitled to full disclosure of the relationship with ValueAct, including, among other things, all fees paid by Disney in the 10-year period preceding ValueAct’s Board approval,” the company said .
ValueAct acquired a stake in Disney (DIS) in the second half of last year and the two entered into an information-sharing agreement along with ValueAct’s promise to support Disney’s director slate.
In the latest developments in the board battle, investment advisor Egan-Jones has backed Trian’s nominees. Among other proxy advisors, Glass Lewis fully supports Disney’s slate of directors, while ISS supports the election of Peltz but not Trian’s other candidate, Jay Rasulo.
The Disney Annual Meeting (DIS) is set for Wednesday, April 3.