(Reuters) – A Delaware judge on Wednesday said former CBS shareholders could pursue a lawsuit accusing Shari Redstone, daughter of the late media mogul Sumner Redstone, of pressuring the company to enter into an unfair merger that created ViacomCBS Inc.
Vice Chancellor Joseph Slights of the Delaware Chancery Court ruled four weeks after allowing former Viacom shareholders to make similar claims.
In a 157-page decision, Vice-Chancellor Slights said it was reasonable to conclude that the merger process was not fair and that CBS "Substantially" overpaid Viacom.
Redstones National Amusements Inc. had controlled about 80% of the voting power of both Viacom and CBS, even though they only had about 1
Vice Chancellor Slights said the complainants. "statements" allow a reasonable conclusion that CBS's acquisition of Viacom was motivated not only by Redstone's concerns about Viacom's profitability as a continuing business, but also her desire to trade NAI after their consolidation. "
He said the evidence suggests that CBS directors may have approved the merger to" appease "Redstone, who had a" hard determination to get this deal done in one way or another. "
Lawyers for Ms Redstone, the former CBS directors and shareholders did not immediately respond to requests for comment.
Ms. Redstone is the non-executive chairman of Newcom-based ViacomCBS, whose operations include CBS Television, CBS News, Showtime, Comedy Central, MTV, Nickelodeon and the Paramount film studio.
The merger followed unsuccessful merger attempts in 2016 and 2018. Sumner Redstone had split the companies in early 2006. He died in August at the age of 97.
In a footnote, Principal Slights quoted from "A Dance with Dragons," a 2011 novel by George RR Martin, some of which were adapted for the exciting HBO series "Game of Thrones."
He said that CBS and Viacom's shareholders' "competing claims of injustice are reminiscent of the author's reference to the proverb:" A fair finding leaves both sides unhappy. " Whether the proverb is true here remains to be seen.
The case is In re CBS Corp Stockholder Class Action and Derivative Litigation Delaware Chancery Court. Catalog