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ATVI » Topics » Ramalingham Balamohan, Derivatively on Behalf of Nominal Defendant Activision, Inc. v. Robert Kotick, et al.This excerpt taken from the ATVI 10-Q filed Nov 3, 2005.
Ramalingham Balamohan, Derivatively on Behalf of Nominal Defendant Activision, Inc.
v. Robert Kotick, et al. was filed in the Federal Court in Los
Angeles. This complaint made the same
allegations as the previous complaints, but it named all the then current
directors as defendants. In the
California state derivative case, in light of
the ruling dismissing the complaint in the federal class action, plaintiff’s
counsel filed an amended complaint which, while still based on the same factual
allegations that led to the class action being dismissed in federal court,
dropped most of the causes of action and focuses only on the alleged claims of insider
trading and breaches of fiduciary duty.
Activision intends to contest these allegations as vigorously as the
earlier allegations. In the federal derivative case, plaintiff
voluntarily filed a notice of dismissal of the action, without prejudice, pending
resolution of the federal class action and an order dismissing this action was
entered on June 3, 2005.
In addition, we are party to other routine claims and suits brought by us and against us in the ordinary course of business, including disputes arising over the ownership of intellectual property rights, contractual claims, and collection matters. In the opinion of management, after consultation with legal counsel, the outcome of such routine claims will not have a material adverse effect on our business, financial condition, results of operations, or liquidity.
This excerpt taken from the ATVI 10-Q filed Aug 4, 2005. Ramalingham Balamohan, Derivatively on Behalf of
Nominal Defendant Activision, Inc. v. Robert Kotick, et al. was
filed in the Federal Court in Los Angeles.
This complaint makes the same allegations as the previous complaints,
but it names all the current directors as defendants. In the California state derivative case, in light of
the ruling dismissing the complaint in the federal class action, plaintiff’s
counsel has requested additional time to consider whether to dismiss the case
or file an amended complaint that attempts to distinguish this derivative
action from the now dismissed federal class action. Currently, all proceedings
in the California state derivative case are stayed pending plaintiff’s
decision. In the
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federal derivative case, plaintiff voluntarily filed a notice of dismissal of the action, without prejudice, pending resolution of the federal class action and an order dismissing this action was entered on June 3, 2005. Given the result in the federal class action, we do not anticipate that plaintiff’s counsel will attempt to file a new complaint in the federal derivative case.
On July 11, 2003, we were informed by the staff of the Securities and Exchange Commission that the Securities and Exchange Commission has commenced a non-public formal investigation captioned “In the Matter of Certain Video Game Manufacturers and Distributors.” The investigation appeared to be focused on certain accounting practices common to the interactive entertainment industry, with specific emphasis on revenue recognition. In connection with this inquiry, the Securities and Exchange Commission submitted to us a request for information. We responded to this inquiry on September 2, 2003. The Securities and Exchange Commission staff also informed us that other companies in the video game industry received similar requests for information. The Securities and Exchange Commission advised us that this request for information should not be construed as an indication from the Securities and Exchange Commission or its staff that any violation of the law has occurred, nor should it reflect negatively on any person, entity or security. We cooperated fully with the Securities and Exchange Commission in the conduct of this inquiry. In July 2005, Activision was advised by the staff of the Securities and Exchange Commission that Activision is no longer the subject of this investigation and the matter is closed with regard to Activision.
In addition, we are party to other routine claims and suits brought by us and against us in the ordinary course of business, including disputes arising over the ownership of intellectual property rights, contractual claims and collection matters. In the opinion of management, after consultation with legal counsel, the outcome of such routine claims will not have a material adverse effect on our business, financial condition, results of operations or liquidity.
This excerpt taken from the ATVI 10-K filed Jun 9, 2005. Ramalingham Balamohan, Derivatively on Behalf of
Nominal Defendant Activision, Inc. v. Robert Kotick, et al. was
filed in the Federal Court of Los Angeles. This complaint makes the same
allegations as the previous complaints, but it names all the current directors
as defendants. We strongly deny allegations in both derivative cases and
will vigorously defend these cases. In the California derivative case,
Activision, as nominal defendant, filed a motion to stay all proceedings.
The case, and all motion practice and responsive pleadings, has been held in
abeyance pending a status conference with the court. In the Federal derivative
case, plaintiff filed a notice of dismissal of the action, without prejudice on
or about June 3, 2005.
On July 11, 2003, we were informed by the staff of the Securities and Exchange Commission that the Securities and Exchange Commission has commenced a non-public formal investigation captioned “In the Matter of Certain Video Game Manufacturers and Distributors.” The investigation appears to be focused on certain accounting practices common to the interactive entertainment industry, with specific emphasis on revenue recognition. In connection with this inquiry, the Securities and Exchange Commission submitted to us a request for information. We responded to this inquiry on September 2, 2003. To date, we have not received a request from the Securities and Exchange Commission for any additional information. The Securities and Exchange Commission staff also informed us that other companies in the video game industry received similar requests for information. The Securities and Exchange Commission has advised us that this request for information should not be construed as an indication from the Securities and Exchange Commission or its staff that any violation of the law has occurred, nor should it reflect negatively on any person, entity or security. We
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have cooperated and intend to continue to cooperate fully with the Securities and Exchange Commission in the conduct of this inquiry.
On June 30, 2003, we terminated our Star Trek Merchandising License Agreement with Viacom Consumer Products, Inc. and filed a complaint in the Superior Court of the State of California for breach of contract and constructive trust against Viacom Consumer Products and Viacom International, Inc. (“Viacom”). On August 15, 2003, Viacom filed its response to our complaint as well as a cross-complaint alleging, among other matters, a breach of contract by Activision and seeking claimed damages in excess of $50 million. On February 23, 2005, we reached an agreement with Viacom that settled the legal disputes. As a result of the settlement, all pending lawsuits filed by each party in the Superior Court in Los Angeles regarding this matter have been dismissed by court order dated March 18, 2005. The settlement had no material impact on the financial results of Activision’s operations.
In addition, we are party to other routine claims and suits brought by us and against us in the ordinary course of business, including disputes arising over the ownership of intellectual property rights, contractual claims and collection matters. In the opinion of management, after consultation with legal counsel, the outcome of such routine claims will not have a material adverse effect on our business, financial condition, results of operations or liquidity.
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