Disney Hit With New Lawsuit Ahead of D-Day on April 3

The Walt Disney Company can’t seem to catch a break; the company was hit with yet another lawsuit, this time from Blackwells Capital, LLC.

Over the past few years, Disney has been embroiled in multiple high-profile lawsuits. Whether it was its fight with Florida Gov. Ron DeSantis (that it has now backed down from) or even constant lawsuits from injured guests at the parks, Disney has more than had its hands full when it comes to legal matters.

The latest lawsuit comes from Blackwells Capital and relates to the fight for the Disney board spearheaded by billionaire activist investor Nelson Peltz.

As reported by Business Standard, Blackwells Capital, LLC—claiming that Disney did not properly disclose its financial ties to activist investor ValueAct Capital Management—has asked a Delaware judge to “force Walt Disney Co. to hand over records about its relationship with ValueAct.”

Per the lawsuit, ValueAct “managed more than $350 million of Disney pension monies over a 10-year period,” and this information should have been disclosed before ValueAct backed Disney’s director candidates in an ongoing proxy fight.

Of course, Disney has wholly denied these claims.

“The claims made by Blackwells Capital are baseless, and this is merely their desperate attempt to gain attention for their slate of director candidates,” Disney said in an emailed statement. “No Disney pension plan funds are currently invested with ValueAct nor were they managing any Disney pension plan funds at the time of their entering into an information-sharing agreement with the company.”

Disney further added in this statement that they had offered to meet with Blackwells to provide hard documentation that ValueAct had stopped managing pension funds for Disney; however, the former reportedly declined the offer.

Blackwells, according to the court filing, wants “to inspect corporate books and records to investigate its credible suspicion of wrongdoing regarding Disney’s dealings and disclosures related to ValueAct.”

It’s worth noting that independent third parties, namely proxy adviser Institutional Shareholder Services, has also confirmed Disney’s side of the story.

“In response to an inquiry from ISS regarding Blackwells’ allegations, ValueAct has clarified that it no longer manages assets on behalf of the DIS pension, and that the DIS pension plan fully redeemed its investment before ValueAct built its stake in the company,” proxy adviser Institutional Shareholder Services said in a report earlier this month.

Like activist Disney investor Nelson Peltz, Blackwells wants to see changes to Disney’s board that the Mouse House is opposing. CEO of ValueAct Mason Morfit publically backed Disney’s candidate for its board and made the company’s stance on the matter clear.

How the situation will turn out though, is anyone’s guess until April 3, 2024.