Paramount To Pay $122.5M To Settle 2019 Shareholder Lawsuit Over Viacom-CBS Merger

Paramount has agreed to pay $122.5 million to settle a 2019 lawsuit by Viacom shareholders over the company’s merger with CBS.

The settlement was disclosed today in an SEC filing. In the filing (read it HERE), the company details the chronology of the case brought in Delaware Chancery Court. After disclosing the settlement, the filing notes that the company is suing insurance carriers related to the shareholders’ action.

“The company is currently engaged in litigation regarding insurance coverage against certain of its insurance carriers in the Superior Court of the State of Delaware,” the filing says. “The company intends to pursue its claims vigorously. Pending recovery of any such insurance proceeds, the company will advance funds for the settlement when they become due.”

The settlement requires the approval of a judge in Delaware Chancery Court.

In the suit, shareholders led by the California Public Employees Retirement Fund (CalPERS) had claimed that Paramount chairman Shari Redstone breached her fiduciary duty by pushing allies to ram through the Viacom-CBS merger at investors’ expense. Her motivation, the suit claimed, was to attain the status of “media magnate” like her father, the late Sumner Redstone.

A Paramount rep declined additional comment beyond the material in the filing.

A Delaware Chancery Court judge in December 2020 had rejected the company’s request for the suit to be tossed out.

While Paramount has operated under its current name as a unified entity for more than two years now, it has not completely put the turbulent 2010s behind it. While Viacom and CBS were both controlled by National Amusements, the media entity built by Sumner Redstone and then run by Shari Redstone, the two companies were operated differently and their respective leaders frequently clashed. The final stages of the tenure of disgraced former CBS CEO Les Moonves laid those tensions bare and resulted in a flurry of litigation.