Metropolitan Water Reclamation District Retirement Fund v. Paramount Global

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE METROPOLITAN WATER RECLAMATION DISTRICT RETIREMENT FUND, LABORERS’ AND RETIREMENT BOARD EMPLOYEES’ ANNUITY AND C.A. No. 2025-0377-CDW BENEFIT FUND OF CHICAGO, PARK EMPLOYEES’ ANNUITY AND BENEFIT FUND OF CHICAGO, and GARY MENDELSOHN, Plaintiffs, v. PARAMOUNT GLOBAL, Defendant. POSTTRIAL REPORT Date Submitted: April 15, 2026 Date Decided: June 5, 2026 Gregory V. Varallo, Mae Oberste, Alexander J. Rigby, BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP, Wilmington, Delaware; Christopher H. Lyons, ROBBINS GELLER RUDMAN & DOWD LLP, Wilmington, Delaware; Mark Lebovitch, Jeremy P. Robinson, BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP, New York, New York; David A. Knotts, ROBBINS GELLER RUDMAN & DOWD LLP, San Diego, California; Cristelle R. Rabban, ROBBINS GELLER RUDMAN & DOWD LLP, New York, New York; Joel Fleming, David Dorfman, Lauren Godles Milgroom, Amanda Crawford, EQUITY LITIGATION GROUP LLP, Boston, Massachusetts; Counsel for Plaintiffs Metropolitan Water Reclamation District Retirement Fund, Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago, Park Employees’ Annuity and Benefit Fund of Chicago, and Gary Mendelsohn D. McKinley Measley, Alexandra M. Cumings, Anneliese Ostrom, MORRIS, NICHOLAS, ARSHT & TUNNELL LLP, Wilmington, Delaware; Jonathan K. Youngwood, Meredith Karp, SIMPSON THATCHER & BARTLETT LLP, New York, New York; Counsel for Defendant Paramount Global WRIGHT, M.  The acquisition of Paramount Global (“Paramount”) by Skydance Media LLC (“Skydance”) has spun off three plenary actions by Paramount stockholders challenging the acquisition and three books-and-records cases by stockholders seeking to investigate potential wrongdoing by fiduciaries in connection with the acquisition. This is the third of the books-and-records cases. The parties present a narrow issue to the court. The plaintiffs allege there is a credible basis to investigate if Paramount’s former controller, Shari E. Redstone, exercised 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, Inc. (“NAI”), the entity through which Redstone controlled Paramount. To facilitate their investigation, the plaintiffs say it is necessary and essential for Paramount to produce informal board materials and officer-level materials regarding the departure of three members of the special committee at a sensitive time during negotiations, shortly after NAI prevented the special committee from engaging with a bidder and the special committee instead entered into an exclusivity agreement with Skydance. Paramount disagrees, arguing the plaintiffs do not have a credible basis to investigate wrongdoing and, even if they did, the informal board materials and officer-level materials sought are not necessary and essential to investigate any potential wrongdoing because the formal board materials are thorough, complete, and accurate. The court held a trial on a paper record to resolve the dispute. In this final report, the court makes three main findings. First, reaching the same conclusion as the court did in the first two books-and-records cases, the court finds the plaintiffs have demonstrated a credible basis to suspect potential wrongdoing in connection with the acquisition. Second, the court finds informal board materials relating to the departure of the three special committee members are necessary and essential for the plaintiffs’ investigatory purpose because the formal board materials paint an inaccurate picture of the three directors’ departure from the special committee and Redstone’s role in it, and thus fails to provide accurate details to a key event. Third, the court finds the plaintiffs have not met their burden to show that officer-level materials are necessary and essential to fulfill their proper investigatory purpose. For these reasons, I recommend the court grant judgment in the plaintiffs’ favor on their request for informal board materials relating to the special committee members’ departure, and grant judgment in Paramount’s favor on the plaintiffs’ request for officer-level materials relating to the special committee members’ departure. -2-  I. BACKGROUND The following facts are as I find them based on the parties’ pleadings, pretrial submissions, 54 joint trial exhibits, and the factual stipulations in the parties’ pretrial order. 1 This action stems from a now-completed merger between defendant Paramount 2 and Skydance (“Merger”). 3 Paramount and Skydance announced the Merger on July 7, 2024, which closed on August 7, 2025. 4 Plaintiffs each served demands to inspect Paramount’s books and records related to the Merger process. 5 A. The Key Players Plaintiffs are beneficial owners of Paramount Class B common stock. 6 Paramount is a Delaware corporation headquartered in New York City. 7 Paramount owns a collection of well-known media and entertainment assets, 1 Exhibits are referred to according to the numbers provided on the parties’ joint exhibit list (Dkt. 32 Ex. A) and are cited as “JX __,” unless otherwise defined. 2 Following the merger at the core of this dispute, Paramount is now known as Paramount, a Skydance Corporation. Def.’s Answering Pre-Trial Br. 4, Dkt. 23 (“Def.’s Answering Br.”). 3 Pre-Trial Stipulation and Order ¶ 4, Dkt. 33 (“Pretrial Order”). For more background on the Merger, see State of Rhode Island Off. of the Gen. Treasurer v. Paramount Glob., 331 A.3d 179 (Del. Ch. 2025) (“Rhode Island I”), and Gabelli Value 25 Fund, Inc. v. Paramount Glob., C.A. No. 2024-1353-SEM (Del. Ch. Apr. 8, 2025) (TRANSCRIPT) (“Gabelli” and cited as “Gabelli Tr.”). 4 Pretrial Order ¶ 11; JX 33. 5 See Pretrial Order ¶ 5; JX 37, 39–40, 42 (together, “Demands”). 6 Pretrial Order ¶ 3. 7 Id. ¶ 4. -3- including Paramount Pictures, CBS, Nickelodeon, Comedy Central, BET, Paramount+, and Pluto TV, along with an extensive library of television shows, films, and other intellectual property. 8 Before the Merger, Paramount was publicly traded on the NASDAQ stock exchange. 9 Paramount had two classes of stock: Class A common stock and Class B common stock. Class A common stock carried voting rights; Class B common stock did not. 10 Redstone was the controller of NAI and a former director of Paramount. 11 NAI, in turn, held 77.4% of Paramount’s voting Class A stock and was Paramount’s controlling stockholder during the events giving rise to this dispute. 12 Redstone thus indirectly controlled Paramount through NAI. 13 In 2022, NAI amended Paramount’s certificate of incorporation to codify additional governance and control rights for itself. 14 The amendments barred Paramount, without the consent of the majority of Class A Common Stockholders, from entering into any transaction for: Any sale, issuance, transfer, redemption, lien, encumbrance, or other disposition (including, 8 See JX 36 at 95. 9 Pretrial Order ¶ 4. 10 JX 46 at 2–3 (“Info. Statement”). 11 JX 23 at 18. Pl.’s Opening Pre-Trial Br. 6, Dkt. 19 (“Pl.’s Opening Br.”). 12 JX 6 at 1; see Info. Statement 3. 13 JX 6 at 1–3; Info. Statement 3. 14 See Am. and Restated Certificate of Incorporation of Paramount Global, JX 7 (“Paramount Certificate”). -4-  without limitation, by way of recapitalization, reclassification, dividend, distribution, merger, consolidation or otherwise) of (A) any shares or capital stock or ownership interest of Paramount Pictures Corporation (“Paramount”) or of any direct or indirect subsidiary of the Corporation involved with or supporting, in either case, in a material respect, the Corporation’s filmed entertainment business or any other business of Paramount (Paramount and each such subsidiary, a “Paramount Entity”), or (B) any options, warrants, convertible securities or other rights to purchase or acquire or encumber any shares of such capital stock or ownership interest of any Paramount Entity, in any case to a party that is not the Company. 15 This addition to the Paramount Certificate gave Redstone, through her control of NAI, the ability to unilaterally prevent any merger or sale. 16 B. NAI Forms Paramount On December 4, 2019, Redstone’s father, Sumner Redstone, created Paramount by consolidating two corporations under NAI’s control: CBS Corporation and Viacom, Inc. 17 Sumner Redstone passed away on August 11, 2020, making Redstone NAI and Paramount’s controller. 18 15 Paramount Certificate, art. IX. 16 See Paramount Certificate; JX 43 at 3. 17 See In re CBS Corp. S’holder Class Action and Deriv. Litig., 2021 WL 268779 (Del. Ch. Jan. 27, 2021) (resolving litigation arising from the 2019 CBS-Viacom merger). The court takes judicial notice of the findings of fact in CBS Corp. D.R.E. 202(b). 18 JX 6 at 1. -5-  The newly formed Paramount did not meet Redstone and investor’s high expectations.19 Paramount suffered a significant reduction in its stock price and was sustaining multi-million-dollar operating losses on its streaming platform through 2023. 20 As a result, Standard & Poor’s lowered Paramount’s credit rating to “BBB-” on March 29, 2023. 21 Around this time, Redstone began seriously exploring opportunities to offload the company. 22 C. After Exploring Various Restructuring and Capital Raising Options, Redstone Commits to Selling Paramount In July, media outlets reported NAI was in talks with its creditors to renegotiate some of its outstanding debt. 23 On September 7, NAI closed a financing transaction with BDT Columbia for $25 million to address its cashflow shortfalls. 24 On October 12, Paramount’s board convened to discuss its options given Paramount’s internal financial forecasts and to explore “various strategic alternatives,” such as asset sales or a merger, that could address the corporation’s liquidity issues. 25 Shortly after this meeting, outlets 19 See JX 8 at 1–2; JX 9; JX 24 at 2–3. After trial, Paramount withdrew its hearsay objection to all exhibits other than JX 51. See Dkt. 49 ¶ 1. 20 JX 9 at 2. 21 See Info. Statement 3. 22 See JX 9 at 2; JX 24 at 3. 23 Info. Statement 4. 24 Id. 25 Id. -6- began reporting NAI was open to a merger or selling Paramount and potentially interested in a sale involving itself instead of Paramount. 26 On December 7, news outlets reported NAI and Skydance were in talks regarding a potential acquisition of NAI. 27 On December 8, NAI’s attorneys notified Paramount’s attorneys NAI was “engaged in confidential discussions with multiple parties . . . regarding a potential change in control” of NAI “that would involve the indirect sale of NAI’s ownership interest in Paramount[.]” 28 In response, Paramount’s management began taking steps to prepare for a potential acquisition or sale. 29 By the next week, media outlets began reporting Paramount was “for sale.” 30 In late December, Paramount entered talks with Warner Bros. Discovery and another company about potential transactions involving its assets. 31 The Wall Street Journal also reported NAI and Redstone had entertained proposals from Netflix, Apple, and Comcast as well. 32 At that time, Skydance and its affiliates submitted a proposal to NAI 26 Id. 27 Id.; see also JX 9 at 5. 28 Info. Statement 4. 29 See id. 30 Id. 31 JX 9 at 4. 32 JX 24 at 2–3. -7- whereby Skydance would acquire a controlling interest in NAI subject to a “strategic combination of Skydance and Paramount.” 33 On December 28, NAI’s attorneys, Ropes & Gray LLP (“R&G”), notified Paramount’s counsel, Simpson Thacher & Bartlett LLP, that NAI had received Skydance’s acquisition proposal. 34 R&G informed Paramount that Skydance’s proposed acquisition would be conditioned on a separate transaction where Paramount would combine with Skydance, and that Skydance would negotiate directly with Paramount regarding the correlated merger. 35 The correspondence concluded with a recommendation that Paramount “refer consideration of [Skydance’s] proposed transaction . . . to a committee of independent and disinterested directors[,]” and that “Paramount had the full support of NAI and Ms. Redstone in determining whether to accept or reject a transaction with Skydance.” 36 Soon after, the independent members of Paramount’s board contacted the law firm Cravath, Swaine & Moore LLP (“Cravath”) to discuss retaining it as counsel for a soon-to-be-formed special committee. 37 33 Info. Statement 5. 34 Id. 35 Id. 36 JX 45 at 5. 37 Id. -8- D. Paramount Forms a Special Committee On January 2, 2024, Paramount’s board voted to form a special committee of the directors on Paramount’s board that Paramount deemed were independent (“Special Committee”). 38 The Special Committee originally consisted of directors Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Dawn Ostroff, Charles E. Phillips, Jr., Susan Schuman, Nicole Seligman, and Frederick O. Terrell. 39 Immediately after its formation, the Special Committee held its first meeting and retained Cravath as its legal counsel. 40 On January 3, Cravath and R&G attorneys held a call to discuss a potential three-party transaction between Paramount, NAI, and Skydance. 41 During this call R&G informed Cravath that NAI would “support Paramount’s independent decision-making.” 42 The next day, the Special Committee met 38 Info. Statement 5. As described by Paramount, “[e]ach member of the Special Committee (a) is not affiliated with NAI, (b) is not a member of Paramount management, (c) does not have an interest in the proposed transaction[,] and (d) otherwise does not have any interest or relationship that would interfere with the exercise of his or her independent judgment in carrying out the responsibilities of, or that is likely to have an adverse impact on his or her ability to fulfill his or her obligations as a member of, the Special Committee in evaluating any potential transaction.” Id. 10. 39 Id. 5. 40 Id. 41 Id. 42 Id. 5–6. -9- again to discuss Cravath’s conversation with R&G and opted to retain an independent financial advisor. 43 On January 8, Skydance submitted a non-binding indication of interest to combine Skydance with Paramount and cause certain Skydance affiliates to make additional cash investment in Paramount, in tandem with Skydance acquiring a controlling interest in NAI. 44 At a Special Committee meeting the next day, Paramount’s CEO suggested potential alternative counterparties to a transaction, including a private equity firm and an industry peer. 45 The process heated up after news outlets reported that NAI had launched a formal auction to court potential acquirers and that Skydance was partnering with other investors for an all-cash acquisition of NAI. 46 From this point until early March, the Special Committee engaged with several interested parties in concert with Cravath and the Special Committee’s independent financial advisor, in addition to continuing discussions with Skydance. 47 43 Id. 6. 44 Id. 45 Id. 6–7. The identities of these counterparties were not publicly disclosed. See id. (anonymizing the suggested counterparties). 46 Id. 7. 47 See id. 7–15; JX 10. - 10 -  On March 6, the private equity firm Apollo Global Management offered $11 billion to purchase just Paramount Studios. 48 On March 11, the Special Committee considered Apollo’s offer.49 At the meeting, the Special Committee agreed Apollo’s offer “warranted further consideration and discussion” but the Special Committee also noted any such transaction would need to be approved by NAI and, ultimately, Redstone due to Article IX of the Paramount Certificate. 50 The Special Committee’s financial advisor also informed it that “NAI was unlikely to favor a private equity firm such as Apollo” over a strategic counterparty due to Redstone’s preference not to break apart Paramount. 51 The minutes noted several directors “expressed skepticism” NAI would support a transaction with Apollo, but thought the “viability” of selling Paramount Pictures as a standalone company should be explored. 52 On March 12, the Special Committee met again and revived discussions on Apollo’s proposal. 53 The Special Committee’s advisors informed it “a sale of Paramount Pictures would require” NAI’s approval, and advised “it would 48 See Info. Statement 15; JX 10; JX 11 at 4–8. The Information Statement defines “Paramount Studios” as “Paramount Pictures and certain of Paramount’s other film and television studios (excluding CBS Studios and Paramount’s other primary television studios).” Info. Statement 15. 49 See JX 11 at 2. 50 Id.; Info. Statement 15. 51 JX 11 at 2; Info. Statement 15. 52 JX 11 at 2–3; Info. Statement 15. 53 JX 12 at 1–2; Info. Statement 15. - 11 - be in the [Special] Committee’s interest to coordinate with NAI” given its ultimate power to approve or veto any contemplated transaction.54 The Special Committee then deliberated on Apollo’s proposal, noting it did not believe Redstone would support a standalone sale of Paramount Pictures. 55 The Special Committee ultimately determined that, despite Redstone’s preferences, it would continue exploring the “sale of key assets” and the impact such a sale would have on other bids, unless NAI informed it in writing that NAI would not support the sale of such key assets. 56 The next day, Skydance provided Cravath and the Special Committee’s financial advisor a revised transaction proposal57 which the Special Committee discussed at its March 14 meeting. 58 The Special Committee rejected Skydance’s proposal and instructed its advisors to inform Skydance it would not agree to a transaction where “existing Skydance investors (or their affiliates) would own a majority of the post-transaction” company unless Skydance improved other terms to increase value for Paramount’s public stockholders. 59 54 JX 12 at 2; Info. Statement 15 (referring to Paramount Studios as opposed to Paramount Pictures). 55 See JX 12 at 2; Info. Statement 15. 56 Info. Statement 15. 57 Id. 15–16. 58 Id. 16. 59 Id. - 12 - E. Four Special Committee Members Announce Their Departures as the Bidding Heats Up On March 19, the Special Committee reconvened to continue its work.60 At the meeting, Cravath informed the Special Committee that Special Committee members Ostroff, Seligman, and Terrell and director Rob Klieger would not be standing for re-election at Paramount’s annual meeting in June. 61 Following this announcement, the Special Committee continued to meet and evaluate proposals from interested parties and negotiate with Skydance, among other bidders. 62 On March 24, R&G informed Cravath NAI would not support a standalone sale of Paramount Pictures to “any potential buyer” even at a price doubling Apollo’s initial $11 billion bid. 63 That same day the Special Committee met with Skydance’s CEO and its financial backers to evaluate the financial outlook of a combined entity. 64 On March 31, Apollo offered to purchase all of Paramount for $27 billion. 65 Despite the larger offer, however, Apollo’s revised proposal did not 60 See JX 13; JX 23 at 3. 61 See JX 13; Jessica Toonkel, Four Paramount Directors to Step Down as Company Discusses Skydance Merger, WALL ST. J., Apr. 10, 2024, JX 21 (“Wall Street Journal Article” and cited as “WSJ Article”). 62 See Info. Statement 16–18. 63 Id. 18. 64 Id. 65 Id. 19–20. - 13 - include other proposed terms for the transaction, “including details about how the acquisition would be financed” and allocating consideration between Paramount’s Class A and Class B stockholders. 66 The Special Committee convened on April 1 to discuss Apollo’s new proposal, particularly in light of Skydance’s request to sign an exclusivity agreement for the merger negotiations. 67 Following the Special Committee meeting, Cravath contacted R&G to request NAI’s opinion on Apollo’s new bid.68 R&G informed Cravath that NAI viewed Apollo’s proposal as “unactionable” and that pursuing it “did not warrant the risk of Skydance walking away[.]” 69 On April 3, the Special Committee met again in response to an updated proposal from Apollo that “clarified certain of the proposed terms,” including that the purchase price would be paid in cash at closing and that Apollo had the capital to fund 100% of the proposed transaction. 70 The Special Committee again expressed doubts about the viability of Apollo’s proposal and, after considering the timing, opted to continue negotiating exclusively with Skydance. 71 66 Id. 20–21. 67 Id. 21. 68 Id. 69 Id. 70 Id. 71 Id. 21–22. - 14 -  On April 4, Ostroff and Seligman resigned from the board and Special Committee, purportedly “in anticipation of not standing for re-election at the 2024 Annual Meeting of Stockholders[.]” 72 The board’s Nominating and Governance Committee convened on April 8 and approved a slate of directors for the 2024 nomination process. 73 The committee did not nominate anyone to fill the two former and two resigning directors’ seats, which would reduce the size of Paramount’s board by four directors, from eleven to seven. On April 10, the Wall Street Journal reported Ostroff, Seligman, Terrell, and Klieger would step down from Paramount’s board. 74 The article also claimed one of the departing directors “expressed concerns about the potential Skydance deal[.]” 75 That same day, Paramount’s board approved the reduced slate of director nominees for election at the annual meeting that did not include Ostroff, Seligman, Terrell, or Klieger. 76 F. The Special Committee Approves Skydance’s Proposal On April 12, the Special Committee met to discuss the proposed transaction with Skydance in more detail. 77 That same day, Skydance’s counsel 72 Id. 22. This reduced the size of the Special Committee from eight directors to six. Id. 73 JX 19–20. 74 See WSJ Article 1–2; Info. Statement 23 75 WSJ Article 2. 76 JX 22; see also JX 23. 77 Info. Statement 22–23. - 15 - sent Cravath an initial draft for the merger agreement. 78 The Special Committee continued to engage with Skydance on the proposed transaction, meeting eight more times in April, 79 and twelve times in May. 80 On June 4, Paramount held its annual meeting. 81 Ostroff, Seligman, Terrell, and Klieger did not stand for re-election. 82 Terrell stepped down from the board and Special Committee on this date as his term ended. 83 On June 8, the now-downsized Special Committee convened again for an update on the negotiations with Skydance and to discuss next steps. 84 The meeting minutes indicate discussions involving the transaction consideration, Skydance’s proposed differential consideration for Class A and Class B common stockholders, and the resulting governance changes to the surviving entity. 85 The Special Committee met over a dozen more times to finalize the transaction details with Skydance. 86 78 Id. 24. 79 See id. 22–27. 80 Id. 27–34. 81 See JX 23 at 3. 82 See JX 23 at 18 (previous board), 31–34 (board members standing for election); Info. Statement 36. 83 Info. Statement 36. 84 JX 29; Info. Statement 38. 85 JX 29 at 1–2. 86 See Info. Statement 38–44. - 16 -  On July 7, the Special Committee unanimously approved the transaction terms and recommended the full board approve the Merger and vote to submit the proposal to the stockholders for approval. 87 Paramount’s board met that same day and unanimously approved the Merger, in addition to recommending that Paramount’s stockholders vote to approve it as well. 88 That day, Paramount and Skydance publicly announced the Merger and summarized its key terms in a press release. 89 The Merger terms also gave Paramount a “go-shop” period so the Special Committee could consider alternative transaction proposals. 90 The Special Committee instructed its financial advisor to contact potential counterparties to gauge their interest in submitting competing proposals to Skydance’s. 91 After contacting 58 potential parties, only seven expressed interest in a potential transaction. 92 The Special Committee engaged these parties in discussions but the other parties ultimately withdrew their proposals. 93 87 Id. 44. 88 Id. 45. 89 JX 33. 90 Info. Statement 45. 91 Id. 92 Id. 93 Id. 45–49. - 17 -  On August 26, Cravath notified Skydance the go-shop period had expired, and the Special Committee publicly announced the same. 94 On November 4, Paramount filed a preliminary information statement/prospectus regarding the Merger with the Securities and Exchange Commission. 95 G. Plaintiffs Serve Their Demands and Paramount Produces Some Records By letters dated November 26, 2024 and January 22, January 27, and February 4, 2025, Plaintiffs served their Demands. 96 The Demands stated Plaintiffs’ purpose was to investigate potential misconduct, wrongdoing, or breaches of fiduciary duty arising from the announced Merger. 97 Paramount responded to the first demand on December 11, 2024, 98 the second and third on February 5, 2025, 99 and the fourth on February 11. 100 In its responses, Paramount partially rejected the Demands, but offered to meet and confer about the scope and terms of production. 101 The parties executed a confidentiality 94 Id. 49. 95 See JX 36. 96 Pretrial Order ¶ 5; JX 37; JX 39; JX 40; JX 42. 97 JX 37; JX 39; JX 40; JX 42. 98 JX 38. 99 JX 43; JX 44. 100 JX 45. See also Pretrial Order ¶ 6. 101 JX 38; JX 43; JX 44; JX 45. - 18 - agreement and Paramount produced responsive records to Plaintiffs through July. 102 On July 29, Paramount certified its production in response to the Demands was complete. 103 By letter dated August 5, Plaintiffs asked Paramount to confirm in writing it had produced all responsive formal board materials and whether Paramount would produce informal board or officer- level materials related to the departures of Special Committee members Seligman, Ostroff, and Terrell (“Director Departures”). 104 The Merger closed two days later. 105 On September 15, Paramount responded to Plaintiffs’ August 5 letter.106 In its response, Paramount represented it had already produced all responsive formal board materials and declined to produce any informal or officer-level materials relating to the Director Departures. 107 Paramount offered to reproduce one document with fewer redactions, among documents related to other subjects. 108 102 See Pretrial Order ¶ 9. 103 Pretrial Order ¶ 9. 104 Pretrial Order ¶ 10; JX 50 at 3. 105 Pretrial Order ¶ 11. 106 Pretrial Order ¶ 12; JX 52. 107 JX 52 at 4; Pretrial Order ¶ 12. 108 JX 52; Pretrial Order ¶ 12. - 19 -  After Paramount produced the additional records, the parties met and conferred again. 109 The parties narrowed their dispute to one category of documents: those related to the Director Departures. 110 II. PROCEDURAL POSTURE On April 8, 2025, Plaintiffs initiated this inspection action to maintain their standing in case the Merger closed before the dispute was resolved.111 On April 21, the court entered a stipulated order staying these proceedings while the parties attempted to resolve their dispute. 112 On December 16, the parties asked the court to lift the stay and enter a joint proposed case schedule. 113 The court granted the proposed case scheduling order on December 22. 114 109 Pretrial Order ¶ 13; see JX 53. 110 See Pretrial Order ¶ 13 (“The parties were able to narrow their disputes, but “remain[ed] at an impasse as to one category of documents sought by Plaintiffs,” i.e., Request No. 2.”). Originally, this information request would have included the departure of director Bakish, because he was identified along with Ostroff, Seligman, and Terrell in Stockholders’ Request No. 2. See, e.g., JX 42 at 46. But Plaintiffs’ pretrial briefs make it clear that the dispute is now just over the departures of Ostroff, Seligman, and Terrell. See, e.g., Pls.’ Opening Pre-Trial Br. 38, Dkt. 19 (“Pls.’ Opening Br.”) (“The Court should order [Paramount] to produce informal materials— including emails and text messages—concerning the resignations (or terminations) of the Special Committee members.”); Pls.’ Reply Pre-Trial Br. 31, Dkt. 26 (“Pls.’ Reply Br.”) (stating same); Pls.’ Post-Trial Suppl. Submission 9, Dkt. 50 (“Pls.’ Suppl. Br.”) (stating same but substituting “the departures” in place of “the resignations (or terminations)”). 111 See Pls.’ Opening Pre-Trial Br. 21; but see Pretrial Order ¶¶ 7–8 (“After filing . . . the parties agreed to attempt to resolve or narrow Plaintiffs’ claims. To that end, the parties stipulated to a stay of proceedings . . . .”). 112 Dkt. 7. 113 Dkts. 10–12. 114 Dkt. 14. - 20 -  On January 5, 2026, Paramount answered the complaint. 115 On January 13, Plaintiffs filed their pretrial opening brief. 116 On February 13, Paramount submitted its answering brief. 117 On February 27, Plaintiffs submitted their reply brief. 118 On March 13, the court held a half-day trial on the matter. 119 On March 24, the court sent the parties a letter stating it believed its decision should await and consider the Supreme Court’s then-pending decision in Paramount Global v. State of Rhode Island Office of the General Treasurer, ex rel. the Employees’ Retirement System of Rhode Island (“Rhode Island II”). 120 On March 26, the Supreme Court decided Rhode Island II. 121 The court asked the parties for supplemental briefing on three questions in response to the Supreme Court’s decision in Rhode Island II. 122 The parties submitted their supplemental briefs on April 15 and the court considers the matter submitted for decision on that date. 123 115 Dkt. 18. 116 Dkts. 19–20. 117 Dkt. 23. 118 Dkt. 26. 119 Dkt. 38. 120 Dkt. 44. 121 See 2026 WL 820647 (Del. Mar. 25, 2026). 122 Dkt. 46. 123 Dkts. 50–51. - 21 -  III. ANALYSIS “Section 220 of the Delaware General Corporation Law provides a ‘qualified’ right for stockholders to inspect corporate books and records.” Scarantino v. Trade Desk, Inc., 2025 WL 3496644, at *3 (Del. Ch. Dec. 5, 2025) (quoting Seinfeld v. Verizon Commc’ns, Inc., 909 A.2d 117, 119 (Del. 2006)). “Section 220 allows ‘[a]ny stockholder’ of a Delaware corporation (and members of nonstock corporations), ‘upon written demand under oath stating the purpose thereof,’ to inspect the company’s ‘stock ledger,’ stockholder list, and ‘books and records’ ‘for any proper purpose.’” Barkan v. Exabeam, Inc., 2025 WL 1088821, at *5 (Del. Ch. Apr. 11, 2025) (quoting 8 Del. C. §§ 220(a)–(b) (2010)).124 “There is no shortage of proper purposes under Delaware law[.]” Melzer v. CNET Networks, Inc., 934 A.2d 912, 917 (Del. Ch. 2007) (citation omitted). “Once a proper purpose is shown, Section 220 does not restrict how stockholders may ultimately use the information. They may ‘seek an audience with the board to discuss proposed reforms,’ ‘prepare a stockholder resolution for the next annual meeting,’ ‘mount a proxy fight to elect new directors,’ or sue[,]” among other things. Barkan, 2025 WL 124 Section 220 was amended in March 2025. See 85 Del. Laws ch. 6. Because the Demands were served on Paramount before February 17, 2025, this action is governed by the version of Section 220 that was in effect until March 25, 2025. See id. § 3 (“Sections 1 and 2 of this Act do not apply to or affect . . . any demand to inspect books and records made, on or before February 17, 2025.”). Citations in this report to Section 220 refer to the legacy statute. - 22 - 1088821, at *5 (quoting Saito v. McKesson HBOC, Inc., 806 A.2d 113, 117 (Del. 2002)). Books and records inspections under Section 220 are not tantamount to comprehensive discovery. See KT4 P’rs LLC v. Palantir Techs. Inc., 203 A.3d 738, 751 (Del. 2019) (“Palantir”) (quoting Sec. First Corp. v. U.S. Die Casting & Dev. Co., 687 A.2d 563, 570 (Del. 1997)). A stockholder’s inspection right is limited to the books and records that are “essential and sufficient to the stockholder’s stated purpose.’” Thomas & Betts Corp. v. Leviton Mfg. Co., Inc., 681 A.2d 1026, 1034 (Del. 1996). “That limitation reflects a ‘proper balance between the rights of shareholders to obtain information’ and ‘the rights of directors to manage the business of the corporation without undue interference from stockholders.’” Barkan, 2025 WL 1088821, at *5 (quoting Seinfeld v. Verizon Commc’ns, Inc., 909 A.2d 117, 122 (Del. 2006)). The parties have narrowed their dispute to two categories of records in the Demands: (1) Informal Board Materials and (2) Officer-Level Materials concerning the Director Departures. 125 Plaintiffs seek these records to investigate possible breaches of fiduciary duties and corporate wrongdoing. 126 125 See supra note 110. The terms “Informal Board Materials” and “Officer-Level Materials” are defined in the Demands. See JX 37 at 50–51 nn. 45–46; JX 39 at 48– 49 nn. 45–46; JX 40 at 48–49 nn. 45–46; JX 42 at 48–49 nn. 45–46. 126 JX 42 at 46. - 23 -  Paramount does not contest Plaintiffs’ stockholder statuses, the Demands’ adherence to Section 220’s form and manner requirements, or the propriety of Plaintiffs’ stated purpose for inspection. 127 Instead, Paramount maintains Plaintiffs do not have a credible basis to suspect wrongdoing, so their investigation purpose is improper. 128 But even if Plaintiffs do have a proper purpose, Paramount contends the remaining documents in dispute are not necessary and essential to Plaintiffs’ investigatory purpose. 129 Plaintiffs counter they have a credible basis to suspect wrongdoing, so their stated purpose is proper, and the circumstances surrounding the Director Departures necessitate inspecting Informal Board Materials and Officer-Level Materials discussing those events. 130 I agree Plaintiffs have a credible basis to suspect wrongdoing or mismanagement. I start my analysis by addressing Paramount’s objection to the court’s consideration of the New York Times article titled Why Did Shari Redstone Do It?, 131 then I discuss each argument Paramount proffers to deny Plaintiffs’ inspection request, before concluding with the proper scope of production. 127 See Pretrial Order ¶¶ 3, 18–19; Def.’s Answering Br. 16–26; Def.’s Suppl. Post- Trial Br. 1–2, Dkt. 51 (“Def.’s Suppl. Br.”). 128 Def.’s Answering Br. at 10, 16–26; see Pretrial Order ¶¶ 18–19. 129 Def.’s Answering Br. at 26–36; see Pretrial Order ¶ 20. 130 Pls.’ Opening Br. at 24–38; see Pretrial Order ¶ 16. 131 James B. Stewart, Why Did Shari Redstone Do It?, N.Y. TIMES, Aug. 19, 2025, JX 51 (“New York Times Article” and cited as “NYT Article”). - 24 - A. The Court May Consider the New York Times Article to Resolve this Inspection Action The parties dispute whether the court should consider the New York Times Article as post-demand and admissible hearsay evidence to support Plaintiffs’ credible basis inquiry under the holding in Rhode Island II. 132 “The general rule is that when a stockholder seeks relief under § 220, [they] will be limited to evidence identified in the demand and the information available to the stockholder when the demand was made. But under exceptional circumstances, the Court of Chancery may, in the exercise of its sound discretion, consider post-demand evidence that is material to the court's credible basis inquiry and not prejudicial to the corporation.” Rhode Island II, 2026 WL 820647, at *9. This case is one such exceptional circumstance. The New York Times Article is material because it directly addresses the central issue raised here—why Special Committee members Seligman, Ostroff, and Terrell left the board. Considering the New York Times Article is not unduly prejudicial to Paramount, as it appears to necessary to ensure a complete and accurate record, given the article’s seeming inconsistency with Paramount’s argument at trial that “[n]o one was removed from the board. It was a decision not to re-run. There is no dispute about that.” 133 132 Pls.’ Suppl Br.; Def.’s Suppl. Br. 133 Tr. of Mar. 11, 2026 Trial at 34, Dkt. 55 (“Trial Tr.”). - 25 -  Paramount objects to the New York Times Article because it contends the article is unreliable. 134 It argues that because the New York Times Article does not identify the referenced “many other participants” or attribute specific reported information to these sources, the New York Times Article is too vague to be reliable hearsay evidence. 135 Paramount concludes the court should not consider the information therein because the Supreme Court “caution[ed] against the use of such vague hearsay” in Rhode Island II. 136 I conclude the New York Times Article is sufficiently reliable. See Rhode Island II, 2026 WL 820647, at *11. It was deeply reported. 137 The newspaper and the author have received many awards and have excellent reputations. 138 There are no indicia of unreliability, and the article’s discussion of dissension within the board is corroborated by other news reports. 139 Further, the use of anonymous sources in news reporting is routine and unremarkable. See Rhode 134 Def.’s Suppl. Br. 3–5. 135 See id. 5. 136 Id. Defendant makes this assertion without a citation. See id. 137 See NYT Article 4 (noting “a series of interviews [with Redstone] . . . over the past year in person and via video calls” and interviews “with many other participants before and after the deal closed.”). 138 See Awards & Recognition, N.Y. TIMES, https://www.nytco.com/awards/ (149 Pulitzer Prizes) (last visited June 5, 2026); James B. Stewart, N.Y. TIMES, https://www.nytimes.com/by/james-b-stewart (noting Stewart holds “a Pulitzer Prize, a George Polk award, and numerous Loeb awards”). 139 Compare N