2 days Ago By jillg366
A Delaware Chancery Court judge has agreed to expedite a suit by a group New York City pension funds that are shareholders of Paramount Global against would be merger partners Par and Skydance , but denied their request for a temporary restraining order while the case plays out. The suits claims that Paramount breached its fiduciary duty. The merger, its says, will deliver hundreds of millions of dollars in non-ratable benefits to Paramount’s controlling stockholder, Shari Redstone, who approved the deal, which also carries a $400 termination fee and does not include a fiduciary-out provision.
They note that a special board committee had declined to consider an all-cash offer by a consortium called Project Rise submitted after an agreed-upon window to engage with other parties. Related Stories Judge Declines To Block Paramount-Skydance Merger But Sets Pension Fund Lawsuit On Expedited Schedule From "Back" To Bust: Inside The Epic Implosion Of Technicolor Paramount and Skydance inked their merger in July and it then went before the FCC for approval where it still sits. There is an end date of April 7 but the agreement allows that deadline to be extended if regulatory approval is taking longer.
Watch on Deadline The New York City Employees’ Retirement System, the New York City Fire Department Pension Fund, the New York City Police Pension Fund, the New York City Board of Education Retirement System and the Teachers’ Retirement System of the City of New York filed the suit in February against the special committee and subsequently amended it to include Paramount Global, Redstone’s family holding company NAI, Skydance and affiliated parties as defendants. Counsel for Paramount has represented that the earliest the merger can close is March 20, 2025, said Judge Kathaleen McCormick. She said that in a March 4 letter to the court, the Special Committee Defendants represented that they had consulted with “relevant individuals at Paramount and its external advisors” and had no insight into the timing of regulatory approval.
She noted that the bar for expedition is not a high burden and “the court need only ask whether a party has asserted ‘essentially a non-frivolous cause of action.’” Given the uncertainty concerning the FCC process, the judge said, parties must assume that the merger could close prior to the April 7 end date and “work toward a schedule that allows the court to resolve Plaintiffs’ claims sufficiently in advance of that date.” “This is a break-neck pace but doable.
Perhaps the parties can negotiate a more civilized schedule in the event they learn that the FCC process is not likely to conclude by April 7.” However, she ruled, although plaintiffs demonstrated harm sufficient to support expedition, “there does not seem harm proximate enough to warrant a TRO.” “Defendants have not yet set a closing date given the uncertainties with the FCC process.
Defendants are ordered to give Plaintiffs advance notice—optimally of no less than five business days—of the closing date once it is set so that Plaintiffs can renew their Motion for TRO if events warrant.” There’s a lively Paramount docket in Chancery Court currently with Rhode Island pension funds as well as fund manager Mario Gabelli proceeding in two cases requesting transparency of information and documentation on the merger agreement and financial terms. A recent filing by Gabelli says it appears that Redstone is receiving a very hefty premium to other shareholders, Class A and Class B, as well as other benefits, but the extent of that premium and how it was determined isn’t clear.
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