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Delaware Court Sanctions Vince McMahon, Nick Khan in TKO Lawsuit

A Delaware judge has sanctioned Vince McMahon and Nick Khan over destroyed Signal messages, raising their burden of proof in the WWE-Endeavor merger lawsuit.

A Delaware judge has delivered a substantial blow to Vince McMahon and World Wrestling Entertainment (WWE) President Nick Khan in the ongoing shareholder lawsuit challenging the 2023 merger between WWE and Endeavor Group Holdings, Inc. (Endeavor) that created TKO Group Holdings, Inc. (TKO). In a memorandum opinion issued on May 26, 2026, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery imposed sanctions for spoliation of evidence, finding that McMahon, Khan, and other senior figures recklessly permitted the destruction of potentially relevant communications conducted via the encrypted messaging application Signal.

The opinion, which arises from consolidated litigation styled In re World Wrestling Entertainment, Inc. Merger Litigation, finds that the "controlling stockholder and the senior officers acted recklessly—at a minimum—in allowing the spoliation to occur." As a consequence, the court will now presume the truth of five specific factual contentions advanced by the plaintiffs unless McMahon and Khan can rebut them by clear and convincing evidence, a markedly higher standard than the preponderance-of-the-evidence threshold typically applied in civil litigation.

The Signal Spoliation

According to the court's findings, WWE issued two litigation hold notices relevant to the dispute: a "Misconduct Hold" circulated on June 21, 2022, addressing the sexual misconduct allegations against McMahon, and a "Sale Process Hold" circulated on January 19, 2023, addressing matters related to McMahon's return to the company and its exploration of strategic alternatives. Both notices instructed recipients—including McMahon, Khan, Paul "Triple H" Levesque, Stephanie McMahon, and McMahon's Chief of Staff Brad Blum—to preserve all relevant communications, including instant messages and text messages, and explicitly required recipients to suspend any automatic deletion protocols.

The opinion details how the Signal users instead took affirmative steps in the opposite direction. The court found that Khan "used Signal and encouraged others to use it," and that after receiving both legal holds, Khan "failed to disable auto-deletion on any Signal chats" and "frequently adjusted the Signal retention settings for individual chats so that past messages would be lost and future messages deleted." The opinion further found that Khan selectively deleted individual text messages.

Vince McMahon, for his part, testified that he used Signal precisely for its secrecy. As quoted in the opinion: "I was always told about the Signal, and it's good for business because no one can trace you and so forth." The court noted that McMahon, like Khan, "manually changed auto-deletion settings for selected Signal chats so that past messages would be lost and future messages deleted."

Levesque is also discussed in the opinion as a Signal user who, after receiving both legal holds, "did not do anything to check the settings on his phone to ensure that auto-delete was not in operation on any Signal chats." However, the court drew a careful line: the presumed facts arising from the sanctions ruling are tied specifically to the conduct of McMahon and Khan, and do not automatically implicate the other defendants.

The Five Presumed Facts

The court will now presume, unless rebutted by clear and convincing evidence, that:

1. Ari Emanuel's promise to provide McMahon with a continued role at any post-merger company influenced McMahon's decision-making with respect to the merger.
2. Emanuel's offer of indemnification and other legal support related to pending federal investigations of McMahon's alleged misconduct influenced McMahon's decision-making with respect to the merger.
3. McMahon decided to pursue a transaction with Endeavor in 2022, before WWE initiated its formal strategic review process.
4. Khan communicated with Emanuel between August and December 2022 to facilitate a transaction between WWE and Endeavor.
5. McMahon and Khan worked with The Raine Group (Raine) to steer the process toward a deal with Endeavor and away from other potential bidders.

The Emanuel Voicemails

Among the more striking elements of the opinion is its discussion of voicemail messages Emanuel left for McMahon in September 2022. According to the opinion, Emanuel stated in one such message: "I spoke to my lawyer from Latham. Just FYI. Everybody at the DOJ is former Latham lawyers so on that side will be helpful. SEC of course is SEC, but that's just a penalty. As it relates to everything else, yes we can indemnify you and we will. If it's criminal of course you can't stop criminal, but this is not criminal."

In another message, Emanuel reportedly said: "I really do think that we all need to get together and talk through all the issues. Because I think whether it be the DOJ or anything, there's ways around this to figure this out."

The court characterized both messages as linking the proposed transaction with Endeavor to the misconduct allegations against McMahon. It is important to note, however, that the court did not find that Emanuel obstructed any investigation or that McMahon received criminal protection through the deal. The ruling addresses only the influence such offers may have had on McMahon's decision-making in the merger context.

The Timeline and Backchannel Communications

The opinion also lays out a detailed timeline suggesting that discussions between McMahon and Emanuel began well before WWE's formal strategic review process was announced in January 2023. As early as July 22, 2022—the day McMahon initially resigned from his WWE roles—Endeavor President and Chief Operating Officer Mark Shapiro reportedly texted a colleague: "Nick [Khan] and Stephanie are going to take over the WWE for the next nine months. At the end of the nine months Vince [will] be back with a new board or he will take the company private or he will sell it/coming to us. The race is on. The courtship is on."

The opinion further details the role of investment banker Jeff Sine of Raine, Emanuel's longtime financial advisor, who prepared a presentation titled "Project Stunner" describing a potential WWE deal and later switched sides to represent McMahon in the transaction. WWE subsequently retained Raine as a third financial advisor in January 2023, alongside J.P. Morgan and Moelis.

What the Ruling Means—and What It Doesn't

The sanctions ruling does not resolve the underlying merger litigation. The defendants—including McMahon, Khan, Levesque, and former WWE co-Presidents George Barrios and Michelle Wilson—remain free to present their case at trial, and the court explicitly noted that the presumed facts can be rebutted. The court also declined to extend the sanctions to include case-dispositive measures such as default judgment, which the plaintiffs did not request.

However, the ruling materially worsens the position of McMahon and Khan ahead of trial. By shifting the burden of proof on key factual issues and elevating the standard from preponderance of the evidence to clear and convincing evidence, the court has effectively required McMahon and Khan to make a convincing affirmative case to overcome the plaintiffs' theory of the transaction.

This is, importantly, a civil shareholder lawsuit rather than a criminal proceeding, though the underlying allegations intersect with previously reported federal investigations into McMahon's alleged misconduct. As previously reported by Bleeding Cool, McMahon settled a Securities and Exchange Commission (SEC) probe in 2025. His representatives later said a related federal criminal investigation ended without charges. McMahon has also sold significant portions of his TKO stock amid his legal difficulties.

The defendants have denied the central allegations in the case. Before the sanctions ruling, Bloomberg Law reported that McMahon's attorney Haley Stern of Kirkland & Ellis LLP argued there was no gap in communications to probe, describing McMahon as a "prolific texter" and saying that 22,000 messages across multiple platforms had been produced to investors. Eric Leon of Latham & Watkins LLP, representing other WWE executives, argued that the deal was negotiated "the old fashioned way" through in-person meetings and phone calls, and that phone records had been produced. Bloomberg Law reported those comments from the May 13 Delaware Chancery Court hearing; POST Wrestling also summarized the hearing.

For a corporate combination that was marketed as a clean fusion of sports-entertainment titans—WWE and the Ultimate Fighting Championship (UFC) under one publicly traded roof—the Delaware ruling returns the narrative to far less flattering terrain: a controlling stockholder's return after a misconduct scandal, a preferred buyer, a longstanding personal friendship, and now a body of destroyed communications that the court has determined deprived shareholders of evidence to which they were entitled. The plaintiffs are represented by Block & Leviton LLP, Bernstein Litowitz Berger & Grossmann LLP, Robbins LLP, and RM Law, P.C. McMahon is represented by Potter Anderson & Corroon LLP and Kirkland & Ellis LLP. Khan, Levesque, Barrios, and Wilson are represented by Morris, Nichols, Arsht & Tunnell LLP and Latham & Watkins LLP. The case is scheduled to go to trial beginning June 8 in the Delaware Court of Chancery, according to POST Wrestling's report on the publicly filed pre-trial order.

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