The U.S. Government is reportedly urging a federal judge to force a dozen states, led by California, to bear the costs of the holdup caused by their lawsuits challenging the $111 billion mega-merger of Paramount Skydance and Warner Bros. Discovery.
In a statement of interest, the Justice Department argues that the states must post a ‘proper bond’ that considers potential damages and that by doing so “it forces parties to have skin in the game”.
They say as this enforcement mechanism is not being done by the Justice Department or the Federal Trade Commission, certain restrictions apply, including state and private parties posting a bond if an injunction is issued.
Paramount last week continued to press California Attorney General Rob Bonta for a $1.88 billion bond to cover losses if it wins the cases over the temporarily halted deal.
Courts have been wary of issuing massive bonds in merger cases, particularly when state or federal competition enforcers challenge the deal.
The states argue that the court never technically issued an injunction, which would render Paramount ineligible for a bond since the studio voluntarily agreed not to close the deal under a joint stipulation.
The trial has been scheduled for March, months past CEO David Ellison’s target closing date of late September.
Source: THR
