The CBS and Viacom deal is creating controversy regarding the shady roles of the Redstone family and their plans to benefit unfairly from the merger. Now, a Delaware judge has ordered CBS to disclose their internal records related to the deal.
An inquiry into the company
Judge Joseph Slights of the Court of Chancery, Delaware orders CBS to submit materials and internal company records related to the company’s decision to merge with Viacom. It includes materials related to the board’s discussion about the deal. It also wants documents related to appointment and nomination of board members to a special committee, which was crucial in approving the merger deals. The company will also have to submit documents related to communications between board members and Shari Redstone.
Note that CBS and Viacom were a part of a single brand under the Redstone family. The two split over 13 years ago and now plan to reunite to form a mega-corporation. Shareholders of Viacom Inc. suggest that the deal unfairly benefits Shari Redstone’s position, which controls both corporations. Viacom has not made a public statement about the order yet while Viacom has declined to comment.
What’s next for the two companies?
The deal is set to close on December 4, combining Paramount movie studios, Comedy Central, Nickelodeon, CBS television network, CBS, MTV and Showtimes cable networks. National Amusements Inc., a holding company, owned by Sumner Redstone and his daughter Shari Redstone, tried to merge the companies twice before this. However, the latest merger attempt happened at the board level, and the shareholders did not vote on the merger.
Shari Redstone tried to merge the two companies in 2018, but the CBS board rejected her proposal. CEO Les Moonves said at the time that the deal would be harmful to CBS shareholders. After his exit in September of the same year, National Amusements settlement litigation suggesting that it would not seek a merger of the companies for at least two years. Judge Slights suspects that the deal could have violated the 2018 agreement and may affect Redstone’s stake in Viacom.
Delaware Law School professor Larry Hamermesh said that the shareholders would not try to block the deal, which will close in less than two weeks. However, they may try to seek damages from the company in court.
Viacom shareholder Louis Wilen sued the company board on Monday. His proposed class action was filed under seal because of which details about the allegations are still unknown.