In re CBS Corp. Stockholder Class Action & Derivative Litig.

In re CBS Corp. Stockholder Class Action & Derivative Litig.

Opinion

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.

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