Paramount (PARA.US) century-old acquisition is in trouble, Delaware judge raises red flag for review.

According to court documents filed on Thursday, a judge in Delaware, USA is considering taking on charges in a class-action lawsuit involving Hollywood film industry giant Paramount Global (PARA.US) and emerging production company Skydance Media in an $8 billion acquisition deal that allegedly harms public shareholder interests to some extent. The blockbuster deal may be prohibited from completion. American film and media industry tycoon Shari Redstone, as a controlling shareholder of Paramount, reached a so-called "two-step deal" with streaming media newcomer David Ellison's Skydance Media in July last year to sell her stake in this most famous Hollywood film studio. The deal is currently pending regulatory approval. Under the preliminary agreement between the two parties, Shari Redstone will sell National Amusements, which holds 77% of the voting rights shares of Paramount, to Ellison and his trading partners. This deal will transfer control of Paramount from one wealthy family to another led by tech tycoon Larry Ellison. The Redstone family's patriarch Sumner Redstone had built the Paramount-Redstone media empire. The "Paramount Pictures" studio, which shares its name with Paramount Global, is considered the jewel of the Paramount Global Media Group and one of Paramount's most valuable assets worldwide. The studio has an extremely large film IP library, including classic films like "The Godfather," "Breakfast at Tiffany's," as well as series like "Mission: Impossible," "Star Trek," and "Transformers." Over the years, including recently, it has attracted acquisition interest from many private equity firms, including Apollo Global Management Inc. Skydance Media, a film production company, can be considered a rising force in Hollywood. The company's film credits include "Mission: Impossible - Rogue Nation," "Terminator: Genisys," "Star Trek Into Darkness," and "Geostorm." In January of this year, an investor group called Project Rise Partners submitted a $13.5 billion acquisition proposal, which was rejected by the Paramount board's special committee. In response, the New York City Employees Retirement System, which holds shares in Paramount, filed a class-action lawsuit in Delaware Chancery Court, accusing the special committee of not considering the competing bid and violating their fiduciary duty to public shareholders. Judge Kathaleen McCormick of the court agreed to expedite the case on Thursday but refused to issue a temporary restraining order to stop the deal as it is not close to completion. In an eight-page ruling, McCormick wrote, "Although the plaintiffs have demonstrated the necessity of expediting this case, there exists no imminent harm necessitating a temporary restraining order." McCormick required the parties to notify the retirement fund "at least five business days" before completion of the deal in order for them to apply for the necessary injunctive relief. Paramount and Skydance Media have not immediately responded to requests for comment. According to the agreement terms, Skydance Media agreed to a 45-day "go-shop period" allowing Paramount to seek other bids, which expired on August 21st. If Paramount chooses another acquirer, they must pay Skydance Media a $400 million break-up fee. The board had previously considered a competing bid from media industry veteran Edgar Bronfman Jr., but he ultimately withdrew. According to McCormick's ruling, the completion of the deal requires approval from the Federal Communications Commission (FCC), and Paramount has indicated it could be completed as early as March 20th. The merger agreement originally set April 7th as the deadline, with the ability to extend twice if FCC approval is not obtained, each extension for 90 days.