Hasbro Shareholders Drop Magic: The Gathering Lawsuit Alleging C-suite Overprinted Cards, Deceived Customers
· IGN
Hasbro shareholders who filed a lawsuit last month against the company, alleging its management was overprinting Magic: The Gathering Cards, breaching its fiduciary duty, and deceiving consumers, have decided to drop the suit.
A notice of voluntary dismissal filed last week (and spotted by Rhode Island Current) shows Joseph Crocono and Ultain McGlone dropping the case without prejudice, suggesting they may attempt to file again at a later date. There are no further details in the notice as to the reason the lawsuit was dropped.
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The lawsuit, filed in January, alleged breaches of fiduciary duty, unjust enrichment, waste of corporate assets, gross mismanagement, abuse of control, and violations of the Exchange Act on the part of Hasbro management. Its primary claim revolved around the idea that leadership was steering the company poorly by overprinting card sets, thereby devaluing the existing ones and putting the company on track to financial ruin. In particular, it named the culprit as Universes Beyond and Secret Lair, alleging that the company was teeing up the crossover sets to release any time the other segments of its business were struggling and the company needed cash to make up for the shortfall.
And indeed, Hasbro subsidiary Wizards of the Coast has been printing more sets in recent years than in the past, though its revenue has been increasing along with it. In fact, upon its last earnings call, it was revealed that Magic just had its most successful year ever, in no small part thanks to the very sets that the lawsuit claims were at issue.
Additionally, the lawsuit claimed that Hasbro management essentially faked being out of stock of the controversial, extremely expensive Magic 30th Anniversary Set in order to encourage demand, sharing testimonies from former company leadership claiming that they had opted to "pause" sales to give the appearance of the product being out of stock. With the lawsuit dismissed, the merit of this anecdote in particular remains up in the air. It is worth noting that in the weeks since the lawsuit, Wizards of the Coast has put out another controversial, weirdly-priced card offering in its "Prints Charming" Secret Lair set, which consists of five identical listings, all at different prices.
Magic: The Gathering is gearing up for its Teenage Mutant Ninja Turtles set, which releases on March 6.
Rebekah Valentine is a senior reporter for IGN. Got a story tip? Send it to [email protected].