Chicago pension funds win Delaware order over Paramount-Skydance merger files

Three Chicago pension funds just pried open Paramount's boardroom in the Skydance merger fight, with a Delaware ruling forcing fresh disclosures. 

On June 5, 2026, the Delaware Court of Chancery ordered Paramount Global to hand over informal board materials relating to the abrupt mid-negotiation departures of three special committee members. Magistrate Wright found the formal board minutes inaccurately described what happened and the part former controller Shari Redstone played in it. 

The plaintiffs are the Metropolitan Water Reclamation District Retirement Fund, the Laborers' and Retirement Board Employees' Annuity and Benefit Fund of Chicago, the Park Employees' Annuity and Benefit Fund of Chicago, and individual stockholder Gary Mendelsohn. They sued under Section 220 of the Delaware General Corporation Law, which lets stockholders inspect company records for a proper purpose. 

The funds set out to investigate possible breaches of fiduciary duty in the Paramount–Skydance deal, announced on July 7, 2024 and closed on August 7, 2025. They argued that Redstone, who controlled Paramount indirectly through National Amusements, Inc., the holder of 77.4% of Paramount's voting Class A stock, had used her position to block a sale of Paramount in favor of a sale of only NAI - the vehicle through which she controlled the company. 

The court agreed there was a credible basis to suspect wrongdoing. It was the third Chancery ruling to reach that conclusion on the Paramount–Skydance deal, after Vice Chancellor Laster in Rhode Island I and Senior Magistrate Molina in Gabelli. Wright found no compelling reason to depart from those earlier findings and added her own analysis on top. 

She pointed to three potential non-ratable benefits to Redstone identified by the plaintiffs: Skydance's acquisition of NAI on top of Paramount, the preservation of Paramount as a single entity rather than a break-up sale, and Skydance's agreement to indemnify Redstone against liability tied to the merger. The court noted the indemnity in particular may have been uniquely material to Redstone in light of her on-the-record comments in a New York Times feature, where she described feeling boxed in by potential stockholder litigation and wanting out. The court treated the feature as admissible hearsay under the Delaware Supreme Court's recent decision in Rhode Island II. 

Timing mattered too. On March 19, 2024, the special committee was told four of its members - Dawn Ostroff, Nicole Seligman, Frederick O. Terrell, and Rob Klieger - would not stand for re-election. Ostroff and Seligman resigned in early April, while the committee was juggling Skydance and rival bidder Apollo Global Management, which had just offered $27 billion for all of Paramount. Terrell stepped down at the June 4 annual meeting. Paramount's line, at trial and in its formal materials, was that no one had been removed from the board and that the directors had simply chosen not to run again. 

The court found that account hard to square with the rest of the record. The New York Times feature reported, based on a series of on-the-record interviews with Redstone, that she had pushed out Paramount's chief executive and four directors to make it easier to reach agreement on a deal. Wright found this picture strikingly different from the formal minutes and ruled the gap was enough to make informal board materials - including emails and text messages - necessary and essential to the plaintiffs' investigation. 

The plaintiffs lost one piece of the fight. The court declined to order officer-level materials, finding the funds had not alleged any officer role in the merger talks or in the director departures. 

For investors and the advisers tracking controlled-company M&A, the ruling carries practical weight. It reinforces a Delaware pattern in which stockholders can reach past the polished narrative of formal board minutes when the public record points the other way. It also signals that indemnification packages negotiated for controllers can themselves be treated as non-ratable benefits when liability protection is uniquely valuable to that controller. And it adds a third Chancery ruling to a growing line in the Paramount–Skydance litigation.