Paramount Global said Friday that, pending court approval, it will receive $167.5 million in settlement of a suit by shareholders of the former CBS Corp. against some of the broadcaster’s former officers and directors, including Shari Redstone and Joseph Ianiello. Called a derivative suit, it’s filed on behalf of the company, whose parent is getting the cash.
It marks the ends of long-standing litigation of two shareholder suits, by Viacom and CBS stockholders, in Delaware Chancery Court, both related to the 2019 merger of Viacom and CBS. ViacomCBS changed its name to Paramount Global in February 2022.
The Viacom suit was settled last year, with Paramount agreeing to pay shareholders $122 million directly in a settlement. The CBS suit was a bit different in structure, brought on behalf of the company against Redstone, National Amusements, CBS board members and Ianniello, the former CBS president and acting chief executive officer (following Les Moonves’ exit).
The complaint, a consolidation of three class action suits, alleges breaches of fiduciary duties in connection with the negotiation and approval of the merger agreement. It also alleges waste and unjust enrichment in connection with Ianniello’s compensation; the executive left shortly after the merger closed with a $125 million pay package. It claimed majority owner Redstone stacked the Viacom board with allies and jammed the deal through against the best interests of CBS shareholders.
Defendants had tried get the case dismissed, but the judge allowed all but one claim to go forward.
Paramount said in an SEC filing today that parties had agreed to a binding term sheet for the “final dismissal” of the litigation.
The company declined comment beyond the filing who will be paying the $167 million. However, in cases like these, Directors & Officers insurance usually covers the settlement.