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Court of Chancery of Delaware
September 17, 2020, Submitted; January 27, 2021, Decided
CONSOLIDATED C.A. No. 2020-0111-JRS
MEMORANDUM [*3] OPINION
SLIGHTS, Vice Chancellor
The Beach Boys, in their original form, were quintessentially an "American Band."1 Their profound and lasting impact on American culture was recognized yet again in the fall of 2020, when Rolling Stone magazine named their seminal album, Pet Sounds, the second Greatest Album of All Time (of any genre).2 Almost exactly four years earlier, in the fall of 2016, Rolling Stone contributing editor, Rob Sheffield, wrote a review of two memoirs, released weeks apart, from Brian Wilson and Mike Love, either or both of whom (depending upon who you ask) are regarded as the creative force(s) that drove the band to its iconic status.3 In his review, Sheffield observed that while Wilson and Love were in the same band, and presumably shared the same band experiences, their recounting of those experiences, colored by vastly different and, in some respects, antagonistic perspectives, was remarkably different. According to Sheffield, this dynamic resulted in "very different takes on the Beach Boys story."4
This Court recently considered the story of the well-publicized merger of Viacom, Inc. and CBS Corporation, two [*4] quintessentially American companies, as told from the perspective of displeased Viacom stockholders.5 The story was presented in a putative class action complaint where Viacom stockholders alleged the Viacom/CBS merger was the product of actionable breaches of fiduciary duty by Viacom fiduciaries and patently unfair. The Court found the allegations were well-pled and denied motions to dismiss the complaint.6
In a rare, but not unheard of twist, the Court must consider the same story, the story of the Viacom/CBS merger, but this time as told from the perspective of displeased CBS stockholders who allege the merger was unfair to them and the product of actionable breaches of fiduciary duty by CBS fiduciaries. Like Wilson and Love, the CBS and Viacom stockholders offer very different takes on the same sensational story.
As pled in a complaint comprising 267 paragraphs, Plaintiffs' take is this: After Shari Redstone ("Ms. Redstone") consolidated control of both CBS and Viacom under her holding companies, defined collectively below as the NAI Parties, she thrice attempted to merge Viacom and CBS and twice was turned back by the CBS board of directors (the "CBS Board"). The third try [*5] proved to be the charm, resulting in a merger (the "Merger") that spawned nominal Defendant, ViacomCBS.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2021 Del. Ch. LEXIS 12 *; 2021 WL 268779
IN RE CBS CORPORATION STOCKHOLDER CLASS ACTION AND DERIVATIVE LITIGATION
Notice: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.
Subsequent History: Corrected: February 4, 2021
Prior History: CBS Corp. v. Nat'l Amusements, Inc., 2018 Del. Ch. LEXIS 157, 2018 WL 2263385 (Del. Ch., May 17, 2018)
Merger, stockholders, Parties, special committee, negotiations, fiduciary duty, allegations, pled, Settlement, combined, Counts, stock, fiduciaries, holder, disclosure, attended, motion to dismiss, approve, particularity, substantial likelihood, reasonable inference, documents, loyalty, strategic, reasons, breached, futility, comprised, unfair, pleads
Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Evidence, Inferences & Presumptions, Inferences, Business & Corporate Law, Shareholder Actions, Actions Against Corporations, Direct Actions, Derivative Actions, Procedural Matters, Internal Corporate Affairs, Constitutional Law, Relations Among Governments, Full Faith & Credit, Special Proceedings, Class Actions, Certification of Classes, Torts, Fraud & Misrepresentation, Actual Fraud, Elements, Directors & Officers, Terms in Office, Elections, Contracts Law, Damages, Measurement of Damages, Reliance Damages, Mergers & Acquisitions Law, Takeovers & Tender Offers, Duties & Liabilities of Directors & Officers, Appraisal Actions & Dissent Rights, Remedies, Corporations, Shareholder Actions, Negligent Misrepresentation, Securities Law, Implied Private Rights of Action, Elements of Proof, Causation, Standing, Claim Presentation, Corporate Existence, Powers & Purpose, Powers, Ability to Engage in Litigation, Management Duties & Liabilities, Fiduciary Duties, Business Judgment Rule, Demands, Futility, Causes of Action, Self-Dealing, Appeals, Appellate Briefs, Reviewability of Lower Court Decisions, Preservation for Review, Duty of Loyalty, Responses, Motions to Dismiss, Judicial Notice, Standards of Review, Duties & Liabilities, Care, Good Faith & Reasonable Skill, Duty of Good Faith, Shareholder Duties & Liabilities, Controlling Shareholders, Fiduciary Duties, Mergers, Duties & Liabilities of Shareholders, Meetings & Voting, Special Meetings, Fundamental Changes, Fair Market Value, Termination & Winding Up, Distribution of Assets, Unlawful Asset Distributions, Remedies, Equitable Relief, Quantum Meruit, Pleadings, Complaints, Requirements for Complaint, Causes of Action