Paramount Deal Case Off Fast Track Over Project Rise Allegations

A court case with the potential to scuttle Paramount Global’s $8 billion sale to Skydance Media LLC came off the fast track Thursday after new allegations raised doubts about a last-minute topping bid.

A Delaware judge canceled the expedited trial of shareholder claims brought by New York City’s public pension funds, which are seeking to force Paramount to consider the $13.5 billion offer by Project Rise Partners, an investor consortium that’s yet to disclose many of its financing sources. The deal with Skydance would hand the entertainment conglomerate’s reins from media mogul Shari Redstone to producer David Ellison and backers led by his father, Oracle Corp. founder Larry Ellison.

A lawyer for the funds, Grant & Eisenhofer PA partner Michael Barry, said at an emergency hearing that in exchange for targeted disclosures, they’d agreed to drop their request for an injunction blocking the sale to Skydance—expected to close in the first half of the year—and a trial in late March.

The lawsuit is one of several challenging aspects of the transaction in Delaware’s Chancery Court, the leading US forum for merger litigation. Redstone is also seeking to head off regulatory scrutiny from the Trump administration by settling the president’s $20 billion lawsuit over a CBS interview with former Vice President Kamala Harris.

‘Wrong Sheikh’

Thursday’s hearing came a day after Skydance said in a court filing that the partnership’s co-chair made significant misrepresentations in sworn legal affidavits. The production company submitted letters from Blackstone Inc. stating it’s not among the consortium’s syndicated investors and from Goldman Sachs Group Inc. denying that it’s a deal adviser.

Chancellor Kathaleen St. J. McCormick, the court’s chief judge, told an attorney for Project Rise that he had “a good bit of explaining to do” early in the hearing. The lawyer, Steptoe LLP partner Thomas Watson, said many of the allegations concerned a tentative September 2024 term sheet that never went anywhere.

“The accusations are out of context, are flat-out wrong, and they’re improperly designed to cause damage” to the investor partnership, according to Watson. It was inappropriate for Skydance to “go to the court as well as the media accusing us of ‘fraud’ and ‘make-believe’ based on what is, charitably, sloppy research,” he said.

Watson also said one of Skydance’s claims—that Project Rise lied about its financial backing by an Emirati sheikh—reflected a case of mistaken identity. “Skydance reached out to the wrong sheikh,” he said. “Within the Abu Dhabi royal family, I’m informed there are two different sheikhs with very similar names. One is the uncle and one is the nephew.”

Path Forward

An attorney for Skydance, Latham & Watkins LLP partner Blair Connelly, said he was “tempted to respond” to Watson’s presentation but would hold off.

It’s unusual that Project Rise hasn’t moved to formally intervene in the litigation, “as a competing bidder typically would,” McCormick said. “But it sounds as if they’re willing to submit to robust discovery.”

She asked the parties to submit a scheduling order charting a path forward in the case.

Ross Aronstam & Moritz LLP is additional counsel for Skydance. Project Rise is also represented by Baker & Hostetler LLP. Redstone is represented by Abrams & Bayliss LLP and Ropes & Gray LLP. The funds are represented by Grant & Eisenhofer PA, Labaton Keller Sucharow LLP, and Friedman Oster & Tejtel PLLC.

Paramount is represented by Morris, Nichols, Arsht & Tunnell LLP and Simpson Thacher & Bartlett LLP. Its transaction committee is represented by Richards, Layton & Finger PA and Cravath, Swaine & Moore LLP.

The case is N.Y. City Emps. Ret. Sys. v. Bryne, Del. Ch., No. 2025-0126, hearing 3/13/25.