Zynga expands board and creates litigation committee to fight shareholder lawsuits

Faced with growing legal headaches, Zynga has expanded its board of directors to add two new members who will be focused on litigation.

The move was disclosed in a securities filing on Monday that was first spotted by Footnoted, a blog focused on disclosures companies make to the U.S. Securities and Exchange Commission (SEC).

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In the filing, Zynga said its board had created a “Special Ligation Committee.”  The company added two seats to the board and appointed Janice Roberts and Carol Mills to fill them. The sole role of Roberts and Mills will be to serve on that committee “to investigate the claims asserted against certain former and current Zynga officers and directors in three shareholder derivative suits currently pending” in a range of state of federal courts.

The two new directors will have wide-ranging authority in their new roles. They can hire attorneys and advisors, investigate, request documents, and prepare reports to make recommendations about how the company should proceed.

The disclosure is the latest sign of the challenges Zynga faces as it tries to turn itself around. From a peak of $14.69 in 2012, the company’s stock closed at $2.54 per share on Monday. It has largely spent the last four years below the $4 per share level.

Its annual revenue improved in 2015 but was still below revenues for 2013.