Video-Game Partner Loses Bid for Financial Review

(CN) - A partner in a wrestling video-game business does not have the right to demand a sweeping review of the other partner's finances as the companies are about to part ways, the Delaware Court of Chancery ruled.

THQ and Jakks co-produced several games for World Wrestling Entertainment.

Jakks, a Los Angeles-based company, is nearing the end of its licensing deal with WWE. THQ, based in Delaware, is likely to continue to make wrestling games, such as the "Smackdown vs. Raw" series.

The WWE is looking to continue dealing only with THQ. The wrestling promotion has sued Jakks, alleging bribery of its agents to procure licenses.

Jakks sought a books and records review from the joint venture under the Limited Liabilities Company Act. THQ replied twice, providing more than 110,000 pages of documents.

That wasn't enough to satisfy Jakks, which sued for the production of even more records. THQ sent a letter refusing Jakks' request, calling it "overbroad and burdensome."

In its post-trial brief, Jakks stated that it needed the documents "to investigate alleged mismanagement and wrongdoing by THQ in managing the affairs of the joint venture."

Vice Chancellor Lamb denied Jakks' request, ruling that it had not proven mismanagement on the part of THQ.

"Jakks offered nothing to give the court any credible basis to infer that THQ may have breached its fiduciary duty to the joint venture," Lamb wrote.

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