By: Kalea Rosario
Introduction
Delaware corporate law loves a good boardroom showdown. And as a New Year present, it got one. On January 12, 2026, Paramount Skydance started the New Year off by filing a suit in the Delaware Court of Chancery against Warner Bros. Discovery (“WBD”) and its CEO, David Zaslav, alleging that the Board breached its fiduciary duty of disclosure by failing to provide stockholders with complete and accurate information.[1]
This dispute stems from a fight over a merger deal and centers on a common issue in Delaware corporate law: what a company’s board must tell shareholders about how it decided between competing offers.
On the surface, this looks like an installment in the ongoing streaming wars. According to the complaint, WBD’s Board recommended that stockholders reject Paramount’s all-cash $30 per share tender offer in favor of a proposed transaction with Netflix, while doing so, they allegedly withheld basic material information necessary for stockholders to evaluate the competing bids.[2] Paramount seeks targeted disclosure relief, arguing that stockholders have an immediate need for the information being withheld before deciding whether to tender their shares.[3]
This dispute comes from a fight over a merger and focuses on a common issue in Delaware corporate law: when a company’s board has to choose between two different offers, what does the company have to tell the shareholders about the decision-making process, and how they value each offer presented. On the surface, this may look like another chapter in the streaming wars. But legally, the case is far more foundational. It is not just about price. It is about process. And in Delaware, process is everything.
Not “was it the right decision?” But “how did you make the decision?”
Delaware courts are known to show deference to business decisions by the company boards. For instance, the business judgment rule is all about ensuring that the courts themselves do not get in the way of business decisions.[4] And when directors make decisions on an informed basis, in good faith, and without any conflicted motives, the courts will stay out of the matter. [5]
But there’s a catch. That deference presumes that shareholders remain fully informed. When directors solicit stockholders to approve a business transaction, they must provide full disclosure of all relevant and material information within their power as directors.[6] Information is general “material” if there is a substantial likelihood that a reasonable shareholder would consider the information important when making their own voting decision. [7] This means that the question at the heart of the Paramount Skydance v. Zaslav lawsuit isn’t whether Netflix made a more attractive offer, but whether WBD sufficiently disclosed the basis on which the Netflix offer was judged against the offer made by Paramount.
It is important to note that there is no Delaware law that requires a board to follow the higher nominal offer in all instances. Even if the company is reviewed for enhanced scrutiny, the directors still have some leeway.[8] However, if the basis for their decisions is what prompts fairness, it seems shareholders have a right to understand why this decision was made.
Competing Bids and Enhanced Scrutiny
In recent years, the Court of Chancery has continued refining how it reviews sale process cases, focusing heavily on board oversight of negotiations and banker involvement.[9]
Modern commentary reflects a consistent theme: courts rarely condemn the outcome, while they scrutinize a flawed process.[10] The real questions are whether the board properly oversaw its advisors, whether management tilted the process, and whether material banker conflicts were disclosed. [11]
In other words, litigation often becomes less about which bidder “won” and more about whether the playing field was fair and fully explained. And the paramount litigation fits neatly into that mold.
The Post-Trulia Disclosure Landscape
Delaware merger litigation hasn’t just evolved over the past decade, but it has also toughened up. For years, deal cases followed a predictable pattern: sue, add a few extra disclosures, settle, collect fees. Then In re Trulia,the tone changed. The Court of Chancery made clear that “disclosure-only” settlements based on thin claims would no longer get an easy pass.[12]
Disclosure litigation didn’t disappear, but the bar got higher. Now, plaintiffs must show that omitted information is genuinely material, not interesting or incrementally helpful.[13] Courts have grown increasingly skeptical of complaints that amount to nitpicking banker inputs or combing through financial minutiae in search of leverage.[14]
That backdrop matters for Paramount. It cannot simply be argued that additional detail would have been helpful. It must demonstrate that the alleged omitted information would materially alter the total mix of information available to stockholders. That is no small hurdle.
Why Valuation Transparency Is Harder in Media Deals
This case also shows that putting a value on media and streaming companies isn’t easy or precise. Unlike asset-heavy industries with tangible benchmarks, streaming valuations are built on projections, such as subscriber growth curves, churn assumptions, content monetization strategies, intellectual property leverage, and platform integration forecasts.[15] Small shifts in those assumptions can produce dramatically different outcomes. Two sophisticated bidders can look at the same company and reasonably arrive at very different valuations based on risk tolerance and strategic vision.
But it raises a sharper legal question: how much of that comparative reasoning must be disclosed to stockholders?
Delaware courts have made clear that the financial analysis underlying a board’s recommendation can be material. [16] At the same time, they have resisted turning disclosure law into a demand for a “play-by-play” of every boardroom conversation. [17]
That leaves a real tension at the heart of modern deal litigation. Investors want insight into how directors weighed competing visions of the future, but courts are wary of forcing companies to narrate every internal projection debate. In media transactions, where value lives in assumptions about tomorrow, that balance becomes especially delicate.
Expedited Relief and Judicial Restraint
Merger litigation tends to move at lightning speed. Plaintiffs frequently push for expedited proceedings, arguing that flawed disclosures cause irreparable harm that must be addressed before stockholders vote. [18] But not every disclosure fight becomes an emergency.
In this case, early signals from the Court of Chancery suggest a measured approach, declining to accelerate certain aspects of the litigation and rejecting claims of immediate irreparable injury. That procedural posture matters. It reflects a broader reality that Delaware courts are not quick to treat every alleged omission as a crisis requiring judicial intervention.
Especially in the post-Trulia landscape, the Court of Chancery has shown increasing discipline in managing deal litigation, distinguishing between genuinely material disclosure failure and strategic litigation pressure.[19]
Conclusion: Process Is the Plot
At its core, Paramount Skydance v. Zaslav is not really about Netflix, or Paramount, or even the streaming wars. It is about something much more familiar in Delaware corporate law, transparency as the price of deference.[20]
Directors are not required to choose the highest nominal bid, and they are not required to predict the future perfectly. What they are required to do is act loyally, on an informed basis, and when asking stockholders to approve a transaction, disclose material information about how and why they made their decision.
In this new era, plaintiffs face a steeper climb. Courts are wary of turning disclosure law into a tactical weapon or a demand for exhaustive narrative detail.[21] At the same time, Delaware remains clear: when valuation judgments and banker analyses form the backbone of a board’s recommendation, shareholders are entitled to understand the framework that drove those conclusions.
For boards navigating competitive processes, especially in industries like media where value lives in projections and strategic bets, the lesson is straightforward but not simple. A disciplined process and clear documentation are essential. When it’s time to explain the decision, it’s not just the result that matters; being clear about why the decision was made can be what protects the board in court.
The streaming platforms may be battling for subscribers, but in the Court of Chancery, the contest is different. The real question is whether the board can show its work.
About the Author
Kalea Rosario is a third-year law student at Widener University Delaware Law School. She graduated from the University of Delaware, earning her bachelor’s degree with a major in Political Science and a minor in Legal Studies. In addition to being a member of the Delaware Journal of Corporate Law, Kalea serves on the Executive Board of the Transactional Law Honor Society. Following graduation, she plans to sit for the Delaware Bar and begin her career as a criminal defense attorney with the Delaware Office of Defense Services.
[1] Verified Complaint, Paramount Skydance Corp. v. Zaslav, C.A. No. 2026-0044 (Del. Ch. Jan. 12, 2026).
[2] Id.
[3] Id.
[4] Corwin v. KKR Fin. Holdings LLC, 125 A.3d 304 (Del. 2015).
[5] Id. at 312–14.
[6] Morrison v. Berry, 191 A.3d 268 (Del. 2018).
[7] Id. at 282–83.
[8] Coster v. UIP Cos., Inc., 300 A.3d 656 (Del. 2023).
[9] Morrison, 191 A.3d at 282–86 (emphasizing the importance of board oversight, sale-process integrity, and disclosure of conflicts in evaluating transaction fairness).
[10] Coster, 300 A.3d at 674–76 (emphasizing that enhanced scrutiny focuses on the reasonableness of the board’s decision-making process rather than the substantive outcome).
[11] See Id.
[12] In re Trulia, Inc. S’holder Litig., 129 A.3d 884 (Del. Ch. 2016).
[13] Id. at 898–99.
[14] See Matthew D. Cain, Steven Davidoff Solomon & Randall S. Thomas, The Shifting Tides of Merger Litigation, 71 Vand. L. Rev. 603, 631 (2018).
[15] See Press Release, PwC, Global Entertainment & Media Outlook 2024–2028 (July 16, 2024), https://www.pwchk.com/en/tmt/entertainment-and-media-outlook-2024-2028.pdf.
[16] In re Pattern Energy Grp. Inc. S’holders Litig., 2021 WL 1812674 (Del. Ch. May 6, 2021).
[17] Id. at *52-55.
[18] John P. Stigi III & Alejandro E. Moreno, Delaware Court of Chancery Increases Scrutiny on Disclosure-Only M&A Class Actions, Nat’l L. Rev. (Mar. 8, 2016), https://natlawreview.com/article/delaware-court-chancery-increases-scrutiny-disclosure-only-ma-class-action.
[19] Id.
[20] Corwin v. KKR Fin. Holdings LLC, 125 A.3d 304, 312–14 (Del. 2015) (holding that fully informed, uncoerced stockholder approval restores business judgment deference).
[21] In re Trulia, Inc. S’holder Litig., 129 A.3d 884, 898–99 (Del. Ch. 2016) (rejecting disclosure-only settlements based on immaterial supplemental disclosures).
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