Securities Regulation Daily Wrap Up, MERGERS AND ACQUISITIONS—Del. Ch.: Paramount stockholders make case for accessing merger-related docs, (Jun 8, 2026)

By Anne Sherry, J.D.

A magistrate recommended that Paramount stockholders be given board-level but not officer-level materials to investigate Shari Redstone’s alleged influence over the Skydance merger negotiations.

Paramount stockholders alleged a credible basis to investigate if Shari Redstone exercised improper influence over the special committee in talks with Skydance. Further to that finding, Delaware Magistrate in Chancery, Christian Douglas Wright, also found that informal board materials relating to the departure of three special committee members were necessary and essential to that purpose, but that the plaintiffs did not meet their burden to show that officer-level materials were necessary and essential (Metro. Water Recl. Dist. Ret. Fund v. Paramount Global, No. 2025-0377-CDW (Del. Ch. June 5, 2026)).

The plaintiffs theorize that Redstone attempted to block a sale of Paramount in favor of a sale of National Amusements, Inc., the entity through which Redstone controlled Paramount. Prior to the August 7, 2025, closing of the merger, the plaintiffs served books-and-records demands on Paramount and initiated the action in the Chancery Court to maintain their standing. Ultimately, Paramount produced formal board materials but declined to produce any informal or officer-level materials related to the departures of the three special committee members.

Proper purpose. The magistrate first found that the plaintiffs had a proper investigatory purpose. The Chancery Court already held, twice, that there was a credible basis to suspect Redstone interfered with the merger process. Even if those holdings were not controlling, a fresh look at the matter also revealed a credible basis.

The plaintiffs alleged that Redstone received three non-ratable benefits: Skydance bought NAI in addition to Paramount, the merger preserved the Redstone legacy by not breaking up Paramount, and Skydance agreed to indemnify Redstone from merger-related liability. The timing and reporting around the director departures served as additional evidence. Although Redstone did not sit on the special committee, she had consistent contact with the committee, and meeting minutes explicitly stated that her preferences were considered.

Furthermore, a New York Times article that the magistrate considered over Paramount’s objections, reported that Skydance agreed to give Redstone additional payments and that Redstone felt trapped by the threat of stockholder litigation, supporting a finding that indemnification may have constituted a non-ratable benefit.

Board-level materials. In its next finding, the magistrate determined that the plaintiffs are entitled to informal board materials about the director departures. The use of an independent special committee can serve as powerful evidence of fair dealing—if the committee is truly independent and functions effectively. On the other hand, a controller threatening retribution, much less actually removing opposing directors, is evidence of unfair dealing.

While the Times article answered the question of what happened, it did not answer the question of why. Because the formal board materials failed to address or accurately describe the director departures, it was necessary and essential to the plaintiffs’ proper purpose that they be provided informal board materials.

Officer-level materials. However, the magistrate made a third finding that the plaintiffs are not entitled to officer-level materials about the director departures. The plaintiffs did not allege that any of Paramount’s officers played a key role in the merger negotiations or in advising the special committee, and there was no reason to infer their misconduct or that they possessed any information related to the director departures.

The case is No. 2025-0377-CDW.

Attorneys: Gregory V. Varallo (Bernstein Litowitz Berger & Grossmann LLP) for Metropolitan Water Reclamation District Retirement Fund, Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago, Park Employees’ Annuity and Benefit Fund of Chicago and Gary Mendelsohn. D. McKinley Measley (Morris, Nichols, Arsht & Tunnell LLP) for Paramount Global

Companies: Metropolitan Water Reclamation District Retirement Fund; Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago; Park Employees’ Annuity and Benefit Fund of Chicago; Paramount Global

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