On May 17, 2018, Chancellor Andre G. Bouchard issued his ruling, a copy of which is attached here, denying CBS's motion for a temporary restraining order against National Amusements and Shari Redstone. Although the order denied the emergency injunctive relief CBS requested, I view it as a victory for CBS in that Chancellor Bouchard found:
"In my opinion, particularly given CBS's proclaimed commitment to independent board governance, these [CBS's] allegations are sufficient to state a colorable claim for breach of fiduciary duty against Ms. Redstone and NAI as CBS's controlling stockholder.
Chancellor Bouchard indicated that "the court has extensive power to provide redress if Ms. Redstone takes action(s) inconsistent with the fiduciary obligations owed by a controlling stockholder," and therefore he decided that CBS had not demonstrated irreparable harm or that the balance of equities required a TRO. "To demonstrate irreparable harm, a plaintiff must present an injury of such a nature that no fair and reasonable redress may be had in a court of law and must show that to refuse the injunction would be a denial of justice. The alleged injury must be imminent and genuine, as opposed to speculative." The case continues and CBS can seek redress from the court for bad conduct by National Amusements and Redstone, as indeed it already has for their 11th hour amendment of the bylaws immediately before the TRO hearing.
In a future blog post, I plan to address the relevance to other Delaware and non-Delaware corporations of CBS's claim that its majority shareholder had breached its fiduciary duty to the corporation.
A copy of my original May 14, 2018 post o CBS v. National Amusements may be found at https://rickbaileylaw.com/news/2018/5/14/corporation-seeks-an-injunction-against-its-majority-shareholder-for-breach-of-fiduciary-duty.