David Ellison\u2019s Paramount Skydance has asked a judge to force California Atty. Gen. Rob Bonta and his coalition of 11 other states to prepare to set aside as much as $1.9 billion as the Warner Bros. Discovery merger challenge heads into overtime.<\/p>\n
In Monday\u2019s court filing, Paramount requested the plaintiff states, including New York, Colorado, Oregon and Nevada, as well as the Writers Guild of America, post a bond that would cover the \u201cticking fees\u201d Paramount promised to pay Warner shareholders should the deal stretch beyond its anticipated September close. <\/p>\n
Ellison was confident his proposed Warner takeover would sail through its regulatory clearances. President Trump\u2019s Justice Department approved the merger in June, as have dozens of other countries. <\/p>\n
The states would not be required to pay the full $1.9 billion upfront. Instead, they would have to come up with a portion of that amount by Sept. 30. Should the Democrat state attorneys general and WGA lose their lawsuits, they would ultimately have to pay the full amount.<\/p>\n
Monday\u2019s court filing highlights Ellison\u2019s frustrations and the financial pressures that deal delays will bring the media company. The filing also continues Paramount\u2019s full-court political pressure campaign to get Bonta and the other states to abandon their antitrust lawsuit. <\/p>\n
Paramount did not expect such a spirited challenge from Bonta and the 11 other Democratic state attorneys general who banded together with the WGA to try to block the $111-billion merger of two historic Hollywood studios.<\/p>\n
Paramount\u2019s 23-page filing, signed by former high profile federal prosecutor Danielle Sassoon, was intended to rattle the states. <\/p>\n
Paramount is trying to create divisions among the plaintiff states by prompting them to question their resolve in fighting a protracted and potentially expensive legal battle, according to a person familiar with Paramount\u2019s strategy who was not authorized to speak publicly.<\/p>\n
Because WGA has separately sued to unravel the deal, Paramount has asked the judge to have the union post a bond to cover some of the costs, too. <\/p>\n
In its motion, Paramount cited the Clayton Antitrust Act, which is the foundation for Bonta\u2019s lawsuit<\/a>. The law carries a provision to require plaintiffs to post a bond to cover the potential financial harms of halting a transaction. <\/p>\n The bond gives a defendant, in this case Paramount, a way to recover lost funds should they ultimately prevail in court.<\/p>\n