Take-Two being sued by shareholders

The New York Times reports (March 11, 2008) that Take-Two has been hit with a shareholder lawsuit alleging that the EA buyout deal was kept secret to benefit T2′s executives. The same day, Take-Two reported its first-quarter sales were down 15 percent despite Bioshock‘s late 2007 release and the company shipping a million copies of Carnival Games for the Wii.

The New York Times article cites regulatory filings that say Take-Two’s board passed a measure that would increase compensation for management if the company were taken over after it received the private buyout deal. The lawsuit charges that Take-Two failed to field the $26-a-share buyout offer from EA in a way that would best serve shareholders. Take-Two’s stock had tripped 20 cents to 24.65 at the end of trading on March 11, 2008.

The quarterly filing from Take-Two affirmed the April 29, 2008, release of Grand Theft Auto IV and announced a sequel to BioShock, which has so far sold 2 million copies. About the sales, Take-Two Chairman said in the filing, “We believe that our extraordinary creative assets and improving operational efficiency will be sources of significant value for shareholders as the interactive entertainment industry moves further into the current growth cycle.”

While all this financial and legal garbage may eventually stall some of our favorite franchises, it’s hard to see business stopping very many of the Take-Two juggernauts.

Read [New York Times] Site [SEC]