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Take-Two: The Hits Just Keep on Coming

By Chris Bennett, Tudor Carsten, Michael R. Coburn, Sarah Dale-Harris, Pablo Guzman, Danielle (Dani) Lemon, Chris Metcalfe and David Spratley

Despite the fact that sales of their flagship franchise are smashing records this week, Take-Two is still embroiled in all kinds of legal troubles. It was recently revealed that another shareholder has filed a class action suit against the Take-Two board for their handling of the EA takeover bid. This is different than the suit we reported on a few weeks ago. This time, shareholder Michael Maulano accuses Take-Two of a breach of fiduciary duty, and providing "misleading and incomplete" information in its response to the bid. Its not clear how many other shareholders are involved, but Take-Two made the standard comment that the claims lack merit and that it intends to 'vigorously defend against them.'

At the same time, Take-Two won a small victory in a separate class action filed in 2006 over whether the company lied about complying with the ESRB guidelines when submitting GTA: San Andreas for approval and misrepresented the company's stock option awards practices. US District Judge Shirley Wohl Kram held that the suit could go forward, but not with respect to the 'Hot Coffee'/ESRB issue.

There are also rumours that the FTC is taking a closer look at the EA bid to see whether the proposed merger would trigger any anti-competition laws.

Coverage at GameDaily.

Submitted by Michael Mjanes

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Full post as published by Video Game Law Blog on May 02, 2008 (boomark / email).