Activist Disney investor Blackwells Capital is suing the media giant over what it considers an inappropriately cozy relationship with another shareholder, ValueAct Capital.

In the lawsuit filed Thursday in Delaware Chancery Court (read it here), Blackwells raises concerns about whether ValueAct was paid to take a pro-Disney position in a proxy battle with activists. Blackwells and Trian Fund Management have called for new votes on Disney’s board of directors ahead of Wednesday’s annual shareholder meeting, when board election ballots will be officially counted.

The lawsuit asks for “books and records to determine whether misconduct, mismanagement, or breach of fiduciary duty, including possible violations of disclosure obligations under the federal securities laws, occurred.” Blackwells also claims that ValueAct managed Disney pension funds from 2013 to 2023, a fact that Disney failed to disclose when it announced ValueAct’s support.

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The Blackwells’ complaint is rooted in a January 3 Disney announcement. It commended ValueAct’s support for the nominees and management of the company’s board of directors. In return, the company said it would “provide information to the investment firm and consult with ValueAct on strategic matters, including through meetings with the Disney Board and management.”

A Disney spokesperson called the lawsuit’s claims “baseless” and described the complaint as “just their desperate attempt to draw attention to their list of directorial candidates.” The spokesperson continued: “No Disney pension funds are currently invested with ValueAct, nor did they manage Disney pension funds at the time they entered into an information sharing agreement with the company. Before Blackwells filed this lawsuit, Disney offered to meet with them and provide documentation confirming these facts, but Blackwells declined the meeting.

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The legal clash comes after Blackwell’s chairman and CEO publicly endorsed Bob Iger and the company’s official list of nominees on the same day as the ValueAct deal last January. Unlike Trian, which has traded blows with Disney and repeatedly voiced its criticism, Blackwells has reserved most of its ire for Trian and its leader, Nelson Peltz, even as it has proposed three alternative choices for the board.

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Shareholders have already begun casting votes for board candidates, with Trian and Disney spending tens of millions to promote their rival prospects. When the votes are tallied next week, it will likely go down as Disney’s most important shareholder meeting in 20 years, regardless of the outcome.

Shareholders have until 11:59 PM ET on Tuesday to cast their votes. The results will be revealed at the meeting, which will be held virtually and streamed live on Disney’s investor relations website.

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