Recapitalization, Share Swaps and a $263 Million Exit
In May 2022, Funko executed a $74 million recapitalization. The company repurchased 4,251,701 LLC units and carried out a reverse unit split, canceling roughly 1,034,000 units held by pre-IPO owners.
Soon after, Acon exchanged 12,520,559 LLC units for Class A shares and sold them to The Chernin Group at $21 per share — a transaction worth approximately $263 million.
Defense counsel argued the recapitalization wiped out any potential injury and left Class A shareholders unharmed.
Mediation Yields the Funko $5.4M Settlement
After months of discovery — including the exchange of more than 26,000 documents — the parties turned to mediation. They met before Phillips ADR Enterprises mediator David M. Murphy.
At an Oct. 21, 2025 session, Murphy recommended resolving the remaining claims for $5.4 million, contingent on additional data concerning tax distributions received after May 2022.
Under the agreement, defendants must deposit the $5.4 million into escrow within 30 days of court approval of a scheduling order and receipt of wiring instructions. The fund, plus accrued interest, will cover notice and administrative expenses, any court-approved attorneys’ fees and costs, with the remainder distributed pro rata to eligible Class A shareholders who held stock between Nov. 2, 2017, and Oct. 21, 2025.
Plaintiff’s counsel plans to request up to 17.5% of the settlement — about $945,000 — in attorneys’ fees, along with up to $120,000 in litigation expenses, subject to judicial approval.
Separately, the parties agreed that Funko or its insurers will pay $3 million to resolve a previously denied interim fee application connected to the 2022 recapitalization.
