In re World Wrestling Entertainment, Inc. Merger Litigation

── In re World Wrestling Entertainment, Inc. Merger Litigation ── Court: Court of Chancery of Delaware Date: May 26, 2026 Category: General EFiled: May 27 2026 07:57AM EDT Transaction ID 79564177 Case No. 2023-1166-JTL IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN RE WORLD WRESTLING CONSOLIDATED ENTERTAINMENT, INC. MERGER C.A. No. 2023-1166-JTL LITIGATION MEMORANDUM OPINION IMPOSING SANCTIONS FOR SPOLIATION Date Submitted: May 13, 2026 Date Decided: May 26, 2026 Kimberly A. Evans, Lindsay K. Faccenda, Irene R. Lax, Robert Erikson, BLOCK & LEVITON LLP, Wilmington, Delaware; Gregory V. Varallo, Anthony M. Calvano, Tayler D. Bolton, Alexander J. Rigby, BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP, Wilmington, Delaware; Jason M. Leviton, Nathan Abelman, BLOCK & LEVITON LLP, Boston, Massachusetts; Rebecca Boon, Mark Lebovitch, Jonathan D’Errico, BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP, New York, New York; Brian J. Robbins, Stephen J. Oddo, Richard N. Lozano, ROBBINS LLP, San Diego, California; Richard A. Maniskas, RM LAW, P.C., Berwyn, Pennsylvania; Attorneys for Plaintiffs. Michael A. Pittenger, T. Brad Davey, Nicholas D. Mozal, Adriane M. Kappauf, Megan R. Thomas, POTTER ANDERSON & CORROON LLP, Wilmington, Delaware; Sandra C. Goldstein, Stefan Atkinson, Haley S. Stern, KIRKLAND & ELLIS LLP, New York, New York; Attorneys for Defendant Vincent K. McMahon. William M. Lafferty, Ryan D. Stottmann, Alexandra M. Cumings, Jacob M. Perrone, Jialu Zou, Anneliese Ostrom, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware; Michele D. Johnson, Kristin N. Murphy, Ryan A. Walsh, Allison O’Hara, LATHAM & WATKINS LLP, Costa Mesa, California; Colleen C. Smith, LATHAM & WATKINS LLP, San Diego, California; Jordan Mundell, LATHAM & WATKINS LLP, San Francisco, California; Attorneys for Defendants Nick Khan, Paul Levesque, George A. Barrios, and Michelle D. Wilson. LASTER, V.C.  The plaintiffs contend that a corporation’s controlling stockholder steered a sale of the company to his longtime friend. In return, the controlling stockholder received a senior role at the post-transaction company and help dealing with a federal investigation into his alleged sexual misconduct. Discovery revealed that the controlling stockholder and the company’s senior officers communicated using ephemeral messages. Signal is a messaging application. Users can adjust its auto-deletion settings to apply to all their chats or to individual chats. Signal’s default setting preserves messages indefinitely, but the user can enable auto-deletion for all chats. For individual chats, any participant can enable auto-deletion or adjust the setting for all participants in the chat. That means that one participant can cause messages on another participant’s application to disappear. After receiving litigation holds, the controlling stockholder and the senior officers did not take any steps to check the settings on their Signal apps and chats. Not only that, but they manually changed the auto-deletion settings for individual Signal chats to implement short-fuse destruction periods measured in hours or less. Those changes resulted in the loss of the existing messages in those chats and meant that any future messages would quickly disappear. The plaintiffs moved for sanctions based on spoliation of evidence, including electronically stored information (“ESI”). This decision finds that spoliation occurred and that the controlling stockholder and the senior officers acted recklessly—at a minimum—in allowing the spoliation to occur.  As a consequence, the court will presume the truth of a limited number of facts relating to the conduct and motivations of two defendants: the controlling stockholder and the senior officer who openly encouraged Signal use. Presuming those facts to be true forces the defendants to deal with the evidentiary uncertainty that the Signal users created. The defenda