Allied Gaming Resolves Stockholder Lawsuit

Board maintains denial of wrongdoing but agrees to pay legal fees and amend rights agreement to conclude case.

September 12, 2025

Settlement wraps up legal challenge to shareholder protections

In a move to close the loop on a nearly year-long legal dispute, Allied Gaming & Entertainment has updated its shareholder rights agreement and settled a class action lawsuit filed by one of its stockholders. The resolution includes an $85,000 payment to cover legal fees and a formal amendment to the company’s earlier rights agreement.

The backstory started in February 2024, when Allied Gaming adopted a rights agreement designed to protect against hostile takeovers. That agreement came under fire in September 2024, when stockholder Timothy G. Schuebel filed a class action complaint in Delaware’s Court of Chancery. His case challenged the agreement’s structure and the board’s authority to enforce it.

Board opts for targeted updates

Rather than drag the case through the courts, the board chose a direct path forward. On May 30, 2025, they approved a targeted amendment to the agreement. The revision focused on a single section—Section 34—replacing it in full and adding language that clearly preserves the board’s fiduciary responsibilities under Delaware law. A few other technical updates followed, aimed at reinforcing the board’s role in administering the agreement. Everything else remained in place.

The company filed the updated agreement with the SEC on June 5, 2025. That filing addressed the core of the plaintiff’s complaint, which he acknowledged effectively brought the case to a close.

Board resolves matter while standing by original decisions

Allied Gaming’s board stood by its original decisions throughout the process, stating that the company had acted appropriately at every step. Still, in its business judgment, the board opted to pay the $85,000 in attorneys’ fees and expenses—choosing to wrap up the matter and avoid further cost and distraction.

On September 8, 2025, the Delaware Court of Chancery closed the case, pending a procedural confirmation. Allied Gaming was required to confirm that its SEC filing—this one—would serve as official notice to its stockholders. That confirmation would fulfill the court’s disclosure requirements under Rule 23 and mark the final step in the process.

With this resolution in place, the board eliminated an ongoing risk and freed up focus for the company’s broader goals.