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CBS Corporation

CASE CAPTION In re CBS Corporation Stockholder Class Action and Derivative Litigation
COURT Delaware Court of Chancery
CASE NUMBER Consolidated C.A. No. 2020-0111-JRS
JUDGE Honorable Joseph R. Slights
PLAINTIFF Bucks County Employees Retirement Fund
DEFENDANTS ViacomCBS, Inc., Joseph Ianniello, Candace K. Beinecke, Barbara M. Byrne, Gary L. Countryman, Brian Goldner, Linda M. Griego, Martha L. Minow, Susan Schuman, Frederick O. Terrell, Strauss Zelnick, Thomas J. May, Judith A. McHale, Ronald Nelson, Nicole Seligman, National Amusements, Inc., NAI Entertainment Holdings LLC, Shari E. Redstone, Robert N. Klieger and the Sumner M. Redstone National Amusements Trust

Plaintiff challenges the 2019 merger of CBS Corporation and Viacom Corporation (the “Merger”), alleging that the Merger was orchestrated by Shari Redstone, the controlling stockholder of both CBS and Viacom.  Plaintiffs allege that the Merger was the culmination of a years-long effort by Shari Redstone (“Redstone”) to combine the two companies in order to save the floundering Viacom, despite the lack of economic merit of the Merger and the opposition of CBS directors and stockholders alike. Plaintiffs alleged that Redstone wrested control of NAI (the holding company that controls CBS and Viacom) from her ailing father Sumner Redstone, and twice previously attempted to merge CBS and Viacom and failed. The first time she was rebuked by the CBS board of directors, after which she publicly proclaimed that “the merger would get done,” even if Redstone had to “use a different process.”

Two years later, Redstone was back at it, attempting to force a CBS-Viacom merger. This time the CBS board was so concerned that Redstone would force a merger over their objections, that they took the “extraordinary” measure of attempting to dilute her control of CBS to protect CBS and its stockholders from her influence. After hard-fought, expedited litigation, a settlement was reached that resulted in the CBS board turning over, and the addition of six new directors hand-picked by Redstone. Importantly, Redstone and NAI also agreed that they would not propose that CBS and Viacom merge for a period of two years following the settlement.

Nonetheless, only four months after the settlement, Redstone again caused the new CBS board to evaluate a merger with Viacom. Redstone sidelined carry-over directors who opposed her, and enticed CBS’s acting CEO Joseph Ianniello (who previously opposed the Merger) to support her with a hefty compensation package. The Board approved the Merger in August 2019, and it closed on December 4, 2019.

Plaintiff commenced the action by seeking documents pursuant to 8 Del. C. § 220, which allows stockholders to review a company’s “books and records.”  After reviewing these materials, Plaintiff filed its complaint on February 20, 2020.  Plaintiffs allege that the Merger forced the poorly performing Viacom on CBS and destroyed value for CBS and its stockholders for NAI’s benefit. The Court appointed Plaintiff and another stockholder to lead the case on March 31, 2020.  Defendants moved to dismiss.  On January 27, 2021, the Court denied the motion, in a 157-page opinion containing references to diverse sources as Rolling Stone magazine, Game of Thrones author George R.R. Martin, and Greek mythology. 

Since February 2021, Plaintiff has been engaging in document and deposition discovery.  At the same time, Plaintiffs are coordinating their efforts with former Viacom stockholders who assert the opposite of what Plaintiffs allege, namely that the Merger underpaid them. 

A ten-day trial is set to commence on April 17-28, 2023. 

Read Plaintiffs’ Verified Consolidated Class Action and Derivative Complaint Here

Read Memorandum Opinion on the Motion to Dismiss Here