Paramount Skydance Lawsuit, Warner Bros. Discovery Faces Delaware Court Lawsuit Over $108B Takeover
Paramount Skydance filed a lawsuit in Delaware Chancery Court on January 12, 2026, seeking to force Warner Bros. Discovery to disclose critical financial information related to WBD’s rejection of Paramount’s $30-per-share takeover offer. Why is Paramount suing Warner Bros. Discovery? At stake is control of HBO, Warner Bros. Studios, and CNN in what could become the largest leveraged buyout in entertainment history.
On the same day the Paramount lawsuit was filed, Paramount announced plans to nominate directors to Warner Bros. Discovery’s board to vote against WBD’s existing merger with Netflix—escalating one of 2026’s most dramatic corporate battles.
What This Means for Entertainment Industry Investors
This affects you if you’re tracking media consolidation, own WBD stock, work in entertainment, or follow major corporate takeovers.
Understanding the Paramount lawsuit reveals how hostile takeovers proceed, what legal tools bidders use when boards reject offers, and why Delaware courts matter in billion-dollar disputes. The outcome could reshape streaming wars and determine which entertainment giant controls iconic franchises from Harry Potter to DC Comics.
What Is the Paramount Lawsuit About?
The Core Legal Dispute: Information Disclosure
Paramount claims WBD “failed to include any disclosure about how it valued the Global Networks stub equity, how it valued the overall Netflix transaction, how the purchase price reduction for debt works in the Netflix transaction, or even what the basis is for its ‘risk adjustment'” of Paramount’s $30-per-share offer.
The lawsuit asks Delaware Chancery Court to compel WBD to provide this financial information so shareholders can make informed decisions about whether to tender their shares to Paramount.
This isn’t about breach of contract or fraud. It’s about information access under Delaware corporate law.
Why Delaware Chancery Court?
Most major corporations incorporate in Delaware because of its well-developed business law. Delaware requires companies to provide shareholders with material information during takeover battles—a principle called “adequate disclosure.”
When boards recommend shareholders reject hostile offers, Delaware courts can order them to explain their valuation methods and show their work.
Timeline: How We Got Here
September 2025: David Ellison (Paramount Skydance CEO) proposes acquiring WBD at $19 per share
December 5, 2025: Netflix announces deal to acquire WBD’s streaming and studios division for $27.75 per share ($72 billion equity value, $82.7 billion enterprise value)
December 8, 2025: Paramount submits hostile takeover bid valuing all of WBD at $108.4 billion ($30 per share)
December 22, 2025: Paramount revises offer with Larry Ellison personally guaranteeing $40.4 billion in financing
January 7, 2026: WBD board rejects Paramount’s amended offer, calling it inadequate and comparing it to “the largest leveraged buyout in history”
January 12, 2026: Paramount files Delaware lawsuit and announces plan to nominate directors
Who Are the Parties Involved?
Paramount Skydance Corporation
Paramount Skydance was formed from the recent merger of Paramount and Skydance Media, with David Ellison (son of Oracle billionaire Larry Ellison) as CEO. The company operates CBS, Paramount Pictures, MTV, Nickelodeon, and Paramount+ streaming service.
Paramount wants all of WBD—studios, streaming, and cable networks including CNN—to compete with Netflix, Disney, and Amazon.
Warner Bros. Discovery (WBD)
Warner Bros. Discovery was created April 8, 2022, from the merger of AT&T’s WarnerMedia and Discovery, Inc. CEO David Zaslav leads the company.
WBD owns Warner Bros. Studios, HBO, HBO Max, DC Studios, CNN, Discovery Channel, and major entertainment franchises (Harry Potter, Lord of the Rings, DC Comics).
Netflix’s Role
Netflix agreed to acquire WBD’s streaming and studio business for $72 billion in December 2025. Under this deal, WBD would spin off its cable networks (including CNN) into a separate company called Discovery Global.
Netflix isn’t a party to the Paramount lawsuit but is the competing bidder.
Larry Ellison’s Personal Guarantee
Oracle billionaire Larry Ellison personally guaranteed $40.4 billion he’s putting up to bankroll the $78 billion transaction, addressing WBD’s financing concerns. Larry Ellison is one of the world’s richest people and David Ellison’s father.
What Legal Claims Is Paramount Making?
Information Disclosure Under Delaware Law
Paramount isn’t alleging fraud or breach of contract. The lawsuit seeks what’s called “mandamus relief”—a court order compelling WBD to disclose specific information.
Under Delaware General Corporation Law Section 220, shareholders have statutory rights to inspect corporate books and records for proper purposes. During tender offers (when one company offers to buy shares directly from another company’s shareholders), Delaware law requires adequate disclosure so shareholders can make informed decisions.
Plain English: Think of this as forcing WBD to show its math. If WBD’s board tells shareholders to reject Paramount’s $30 offer in favor of Netflix’s $27.75 offer, Delaware courts say WBD must explain how they calculated values.
What Information Does Paramount Want?
From Paramount’s January 12 letter:
- Global Networks valuation: How did WBD value the cable networks (CNN, Discovery Channel, etc.) that would become Discovery Global?
- Netflix transaction valuation: What methodology did WBD use to value Netflix’s mixed cash-and-stock offer?
- Debt adjustment calculations: How does the purchase price reduction for debt work in the Netflix deal?
- Risk adjustment basis: What’s the basis for WBD’s “risk adjustment” that makes Paramount’s cash offer seem less valuable?
What Does Each Party Want?
Paramount’s Goals
Primary objective: Acquire 100% of Warner Bros. Discovery for $30 per share in all cash ($108.4 billion total)
Legal remedies sought: Court order forcing WBD to disclose financial valuation methods
Strategic moves: Install friendly directors at WBD’s 2026 annual meeting who would engage with Paramount’s offer and vote against the Netflix deal
Shareholder strategy: Convince WBD shareholders to tender their shares by the January 21, 2026 deadline, putting pressure on WBD’s board
Warner Bros. Discovery’s Position
Preferred outcome: Complete the Netflix merger, spinning off cable networks as Discovery Global
Board recommendation: Shareholders should reject Paramount’s tender offer
Key arguments: Paramount’s proposal “poses materially more risk” including possibility of the deal falling apart, compared to the “certainty of the Netflix merger”
Financing concerns: WBD questions whether Paramount can actually close a deal requiring “more than $50 billion” in incremental debt through arrangements with multiple financing partners
What Netflix Stands to Gain or Lose
Netflix would acquire Warner Bros. Studios, HBO, HBO Max, and WBD’s content library—dramatically expanding its content production capabilities and franchise portfolio.
If Paramount succeeds, Netflix must pay WBD a $5.8 billion breakup fee. If WBD accepts Paramount’s offer, WBD must pay Netflix a $2.8 billion breakup fee.
What You Must Know
Why This Lawsuit Matters Beyond the Immediate Parties
Entertainment industry consolidation: This case sets precedent for how hostile takeovers proceed in media, especially when boards favor lower cash offers over higher competing bids.
Shareholder rights: The lawsuit tests how much information Delaware courts will force companies to disclose during takeover battles, affecting future M&A disputes across all industries.
Streaming wars endgame: Whether Netflix or Paramount controls Warner Bros. determines the future structure of streaming—three mega-platforms (Netflix-WBD, Disney, Amazon) or four (add Paramount-WBD).
Regulatory scrutiny: The Justice Department opened an investigation December 23, 2025, issuing “second requests” for additional information, signaling potential antitrust challenges regardless of who wins.
How Complex Corporate Litigation Typically Proceeds
Discovery phase: In most corporate lawsuits, parties exchange documents and take depositions over 6-12 months. Paramount’s lawsuit seeks faster relief through a motion to compel disclosure.
Motion practice: Before trial, parties file motions asking judges to decide legal issues. Delaware Chancery Court often rules on disclosure motions within weeks when tender offers are pending.
Settlement likelihood: Most corporate disputes settle before trial. However, Paramount’s hostile posture and WBD’s repeated rejections suggest both sides are prepared for prolonged litigation.
Typical duration: Standard complex commercial cases take 2-4 years. Delaware Chancery Court accelerates timelines when live tender offers create urgency—decisions often come within months.
What Legal Experts Are Saying
Lawyer Raul Gastesi of Gastesi Lopez Mestre & Cobiella said that now that Paramount has been turned down, “it is likely to attempt to seek legal remedy such as a shareholder derivative suit or potentially a direct lawsuit”—which proved accurate with the January 12 filing.
Reuben Miller, head of antitrust at Dealreporter, believes Paramount “would rather come with an increased offer and avoid litigation than roll the dice in Delaware court”, suggesting the lawsuit may be leverage for negotiations.
Media analyst Rich Greenfield predicts Paramount will raise its offer to $32 per share, Netflix will counter, and Paramount will eventually drop its bid.
Plain English: Legal experts see this as either serious litigation or negotiating theater. Delaware disclosure cases move fast, so we’ll know soon whether the court orders WBD to provide information.
What to Do Next
How to Follow the Case
Court: Delaware Court of Chancery (business disputes court)
Access documents: Delaware courts post filings on their public docket system, though immediate access may require paid accounts
Case tracking: Watch for Paramount’s formal complaint filing (expected within days of January 12 announcement) and WBD’s response (typically due within 20 days)
Hearing schedule: Delaware Chancery Court may schedule expedited hearings given the January 21 tender offer deadline
What to Watch For in Upcoming Developments
January 21, 2026: Deadline for WBD shareholders to tender shares to Paramount
Coming weeks: WBD’s 2026 annual meeting advance notice window opens, triggering Paramount’s director nomination process
Court ruling on disclosure: Delaware Chancery Court could order WBD to provide requested financial information, potentially changing shareholder sentiment
Justice Department review: DOJ’s expanded antitrust review involves “requests for additional information or documentary material”, with decisions potentially taking months
Competing bids: Until the Netflix deal closes, other bidders could emerge since WBD is a public company
Where to Find Expert Legal Analysis
Legal publications: Law360, Bloomberg Law, and Reuters Legal provide daily coverage of major corporate litigation including the Paramount lawsuit
Entertainment industry trades: Variety, Hollywood Reporter, and Deadline cover business and legal developments affecting studios and streaming
Business analysis: Wall Street Journal and Financial Times analyze M&A strategy and shareholder implications
Corporate law blogs: Major law firms publish analysis of Delaware Chancery Court decisions affecting M&A transactions
Frequently Asked Questions
Why is Paramount suing Warner Bros. Discovery?
Paramount filed suit in Delaware Chancery Court asking the court to “simply direct WBD to provide information so that WBD shareholders have what they need to be able to make an informed decision” about tendering their shares. WBD hasn’t disclosed how it valued competing offers, and Delaware law requires adequate disclosure during takeover battles.
What does Skydance have to do with the Paramount lawsuit?
Paramount Skydance is the merged company created when Skydance Media acquired Paramount earlier. David Ellison, who founded Skydance, now leads the combined entity pursuing Warner Bros. Discovery.
How much money is Paramount seeking?
Paramount isn’t seeking monetary damages. The lawsuit requests a court order compelling WBD to disclose financial valuation information. Paramount’s takeover bid values WBD at $108.4 billion ($30 per share).
When did the Paramount lawsuit start?
Paramount filed the lawsuit in Delaware Chancery Court on January 12, 2026, the same day it announced plans to nominate directors to WBD’s board.
What court is handling the Paramount case?
Delaware Court of Chancery, which specializes in corporate disputes. Most major U.S. corporations incorporate in Delaware specifically because of this court’s expertise in business law.
Could this lawsuit block the Paramount-Skydance merger?
No. Paramount and Skydance already merged. The lawsuit concerns Paramount Skydance’s attempt to acquire Warner Bros. Discovery.
When will the Paramount lawsuit be decided?
Delaware Chancery Court moves quickly on disclosure motions related to active tender offers. Expect initial rulings within weeks, though the broader takeover battle could extend months as shareholders decide whether to tender shares and regulators complete antitrust reviews.
Pro Tip: Understanding Corporate Tender Offers
What’s a tender offer? When one company offers to buy shares directly from another company’s shareholders (bypassing the target company’s board). Shareholders individually decide whether to “tender” (sell) their shares.
Why it matters: Even if WBD’s board rejects Paramount’s offer, WBD shareholders can still sell to Paramount if they believe $30 cash beats Netflix’s $27.75 mixed offer. That’s why disclosure is so critical—shareholders need accurate information to decide.
How to track: Public companies must file tender offer documents with the SEC. Search “Schedule TO” (tender offer) and “Schedule 14D-9” (target company response) on SEC’s EDGAR database.
Disclaimer: This article provides general information about the Paramount lawsuit for educational purposes only. Legal situations evolve rapidly, especially in active litigation and corporate takeover battles. AllAboutLawyer.com does not provide legal services or represent any parties in this dispute. Court filings, regulatory reviews, and shareholder decisions may significantly change the Paramount lawsuit situation after publication. If you’re a Warner Bros. Discovery shareholder facing tender decisions, or if you have legal questions about corporate takeovers or Delaware corporate law, consult a qualified attorney licensed in your jurisdiction who can review your specific situation and provide personalized legal advice.
Ready to understand more corporate law? Learn how corporate litigation works in major business disputes and what shareholders should know about their rights.
Stay informed, stay protected. — AllAboutLawyer.com
Last Updated: January 12, 2026 — We keep this current with the latest legal developments in the Paramount lawsuit as court filings and corporate actions unfold.
About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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