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Paramount must turn over board-level internal communications relating to Shari Redstone’s ousting of three special committee members that precipitated the studio reaching a deal with Skydance, a court has ruled.
There is a “credible basis to investigate mismanagement or wrongdoing,” wrote Magistrate Judge Christian Wright in the ruling. He added, “Was Redstone simply looking to lessen the discord as the Special Committee went about its business? Or did Redstone act because these directors were a roadblock to a particular deal she wanted to see happen.”
The ruling marks a win for one of several groups of investors who suspect that the deal unfairly benefited Redstone at their expense. They’re pursuing so-called books and records demands, which typically precede big-payout breach of fiduciary duty lawsuits.
The investors, who include the Metropolitan Water Reclamation District Retirement Fund, believe Redstone steered the sale by exercising improper influence over the special committee’s negotiation of the acquisition in order to block a sale of Paramount in favor of a sale of only National Amusements, the entity through which she controlled the studio. The case concerns the production of informal board materials regarding the departure of three members of the special committee during a sensitive time in negotiations, shortly after which a deal was struck with Skydance.
