Paramount Skydance moves to enforce bond requirement in Warner Bros merger case

On September 8, Paramount Skydance Corporation filed reply briefs in support of its request that the district court enforce the requirement that the State Attorneys General and the Writers Guild of America post a bond in connection with their lawsuit to block Paramount's merger with Warner Bros. Discovery, Inc.

The company has satisfied all closing conditions under the merger agreement and received clearances from regulators representing 69 jurisdictions. These two lawsuits are the only remaining barrier to closing this transaction.

"If plaintiffs insist that this transaction is paused during the pendency of their lawsuit, they must accept the financial consequences if their challenge ultimately fails. Paramount agreed to delay closing to facilitate a prompt resolution of the case, while expressly preserving its legal rights and we continue to honor that agreement. We are not asking the district court to lift the no-close order, but to require enforcement of the bond that protects our financial interests while the litigation remains pending," said a Paramount spokesperson.

"But for these lawsuits, the transaction is now otherwise ready to close, and the resulting costs of delay are substantial and quantifiable. The Clayton Act and Rule 65 provide for a bond precisely to protect against exactly those types of losses if a court determines an injunction ultimately is unwarranted. We are confident that the evidence will show that these lawsuits are meritless and look forward to closing the transaction and delivering its benefits in California, across the United States, and around the world."

The filing highlighted the following key points:

• The Clayton Act and Rule 65 require plaintiffs to accept responsibility for the substantial financial harm incurred if their challenge ultimately fails.
• Paramount agreed to delay closing to facilitate a prompt trial. It did not waive its right to the bond protection required while the transaction is paused.
• Paramount has satisfied all conditions to closing the deal. These lawsuits are now the only obstacle to closing and the direct cause of substantial ticking and financing costs.
• Plaintiffs do not dispute Paramount's evidence that the potential harm is real and quantifiable, reaching up to $1.88 billion.
• The WGA itself previously argued that the Clayton Act makes a bond mandatory and requires a "very substantial bond" where an injunction threatens significant financial harm.

As noted in the briefs:

• "[A]t the eleventh hour, after dragging their investigations out for many months without providing feedback on any areas of competitive concern, and just days before final regulatory approvals from the European Commission were secured, plaintiff states filed suit seeking to stymie the transaction while immunizing themselves from economic accountability if Paramount prevails."
• "Paramount simply asks that Plaintiffs honor what the Clayton Act requires: A bond that will compensate Paramount for the damage it will suffer if the injunction proves improvidently granted, i.e., if Paramount ultimately prevails in the litigation and was therefore wrongly prevented from consummating the merger now, as it is prepared to do."
• "Paramount provided unrebutted evidence that, but-for the Order, it may suffer $1.88 billion in damages. Critically, the states never dispute that evidence or otherwise contest that Paramount will suffer financial injury as a result of the Order, both from the ticking fee and the incremental financing costs—a financial harm that the states outright ignore."