DreamWorks Animation CEO Jeffrey Katzenberg has been hit with a lawsuit accusing him of making an improper “side deal” in connection with the company’s $3.8 billion sale to Comcast Corp., Variety reports.
“The Ann Arbor City Employees Retirement System, a DreamWorks shareholder, claimed in a suit filed in Delaware Chancery Court that Katzenberg breached his fiduciary duty to shareholders when he reached an agreement that will pay him 7% of profits, in perpetuity, from a subsidiary he will head — DreamWorks New Media,” Variety reports. “The suit called the arrangement an ‘extraordinarily valuable’ offshoot of the $41-per-share deal DreamWorks cut with Comcast.”
Comcast’s acquisition of DWA is expected to close by the end of this year.
The report quotes the lawsuit saying: “Had Katzenberg not received the extraordinarily valuable side deal, Comcast would have been required to increase the merger price to secure Katzenberg’s support.”