New York: Paramount Global directors agreed to a $167.5 million settlement of investors’ lawsuits over the controversial 2019 merger of CBS and Viacom that created the entertainment company, according to a securities filing
The settlement with CBS investors was reached April 18 according to a US Securities and Exchange Commission filing made public Friday. The derivative lawsuit means the company receives the money from the settlement, while directors’ insurance may pay for it.
The settlement must still be approved by a judge.
The plaintiffs alleged CBS directors - including board member Shari Redstone - mistreated the network’s investors by agreeing to the entertainment companies’ combination. They said directors overpaid for Viacom to help Redstone bolster her family’s media holdings. Her father bought the network in 1999 for $35 billion and then spun it off in 2005.
New York-based Paramount owns TV networks including CBS, MTV and Nickelodeon.
The settlement comes on the heels of a $122.5 million accord reached with Viacom investors that was made public in May. CBS officials declined Friday to comment on the deal beyond the securities filing.
In 2021, a Delaware judge concluded several pension funds who sued over the merger raised legitimate questions about the fairness of the 2019 merger engineered by Redstone, head of Viacom and a CBS board member. She is the daughter of the late billionaire Sumner Redstone, who owned both companies.
Shari Redstone and other directors are also engaged in litigation with insurance carriers who issued policies allegedly tied to the merger. At issue is at least $200 million of coverage provided by 17 different companies, according to court filings.
The Paramount settlement is the latest twist in more than six years of corporate battles at the companies. The combined firm operated as ViacomCBS until it changed its name to Paramount Global last year.
The case is IN RE CBS Corp. Stockholder Class Action and Derivative Litigation, No. 2020-0111-SG, Delaware Chancery Court (Georgetown).
