Blackwells sues Disney for disclosure in relation to Reuters’ ValueAct

By Svea Herbst-Bayliss

NEW YORK (Reuters) -Blackwells Capital increased pressure on Walt Disney (NYSE:) in a long-running board battle, suing the entertainment giant Thursday for information that could indicate possible disclosure violations in its dealings with hedge fund ValueAct Capital.

The lawsuit, filed in a Delaware court, is the latest chapter in a battle over who will sit on Disney’s board of directors and help guide the Mickey Mouse House in business and personnel decisions.

Blackwells and another hedge fund, Trian Fund Management, are trying to persuade investors to elect their directorial candidates while Disney backs its directors.

Blackwells’ lawsuit centers on a relationship between the entertainment company and major hedge fund ValueAct Capital and an information-sharing agreement the two signed earlier this year.

Disney did not immediately respond to a request for comment from Reuters on Thursday.

Disney had fully withdrawn its investment in ValueAct and the firm was no longer managing money for the company when ValueAct built its stake in Disney last year, a person familiar with the matter told Reuters earlier this month with the ValueAct activity.

ValueAct previously ran pension fund assets for Disney and began building a position in Disney late last year.

Earlier this month the company’s chief investment officer and co-CEO, Mason Morfit, supported the re-election of Disney CEO Bob Iger and Disney’s entire board of directors, keeping out the two’s contenders hedge funds.

Blackwells said Disney failed to properly disclose its deal with ValueAct Capital and is now suing to “determine whether any wrongdoing, mismanagement or breaches of fiduciary duty occurred.”

©Reuters.  FILE PHOTO: A screen shot shows the logo and ticker symbol of The Walt Disney Company on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 14, 2017. REUTERS/Brendan McDermid/File Photo

“Disney’s current board has done itself no favors by publicizing the ValueAct deal in the hope of influencing shareholders,” a Blackwells spokesperson said.

“Shareholders are entitled to full disclosure of the ValueAct relationship, including, among other things, all fees paid by Disney in the 10-year period preceding the Board of Directors’ approval of ValueAct.”



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