Paramount Shareholder Sues Ellison Family Over Warner Bros. Deal

A Paramount Global shareholder filed a derivative lawsuit on May 15, 2024, against CEO David Ellison, his father Larry Ellison, and other board members. The suit alleges a breach of fiduciary duty and a secret side deal involving Skydance Media, which is seeking to acquire Paramount. This legal action is the latest in a series of challenges aiming to disrupt the proposed merger.

The lawsuit, filed by shareholder Paul Robbins in Delaware, claims that the Ellison family orchestrated a plan to sell Paramount to Skydance without proper consideration for other potential bidders or the interests of all shareholders. Robbins alleges that the proposed transaction would unfairly benefit the Ellison family and Skydance's backers, including private equity firms like RedBird Capital Partners, while potentially shortchanging other investors. The suit also suggests that the Ellisons may have made promises to former President Donald Trump regarding the future of Paramount.

This legal challenge follows previous attempts by other shareholders to block the Skydance deal. Notably, a group of Paramount shareholders, including the National Legal and Policy Center, had previously sued the company's board and Skydance, alleging similar breaches of duty and conflicts of interest. These lawsuits highlight significant internal and external opposition to the proposed acquisition, raising questions about the deal's viability and the governance practices at Paramount Global.

The derivative lawsuit seeks to hold the defendants personally liable for damages incurred by Paramount due to their alleged misconduct. It aims to halt the Skydance transaction and compel the board to act in the best interests of all shareholders. The outcome of these legal battles could significantly impact Paramount's future ownership and strategic direction.