Writers Guild ask court to reject Paramount request for US$1.9bil bond

The Writers Guild of America, along with California and 11 other states, sought a federal court judge to reject Paramount Skydance's request for a $1.88 billion bond to cover the cost of delay in completing the acquisition of Warner Bros Discovery. California contended that any damages Paramount faced from the delay are self-imposed and urged the court to reject the attempt to pass the burden onto the public and a non-profit union.

Paramount had offered to pay Warner Bros shareholders a daily fee starting on October 1 for every day the transaction took to close, as a way to persuade Warner Bros to abandon its earlier deal with Netflix. The state also argued that Paramount had agreed to refrain from closing the merger until the antitrust case, filed by the states on July 13 to block the deal, was resolved or until June 1, 2027, whichever came first.

Paramount's request for a bond should be denied, argued California Attorney General Rob Bonta, as the company must pay a fee of $7 million a day if the $110 billion merger does not close by September 30. Paramount contended that the states shouldn't be granted a free pass from the responsibility to post a bond against the harms caused by their failed challenge.

The bond requirement exists to prevent a situation where the plaintiff fails and causes significant costs. The Writers Guild of America has also sued to challenge the deal, which Paramount sees as a threat to its plan to become a major rival to Netflix and Disney. The lawsuits are the only hurdle left for the transaction to close, with regulatory entities representing at least 68 countries having approved or declined to challenge the merger. Paramount called the lawsuit "meritless" and expressed its eagerness to complete the transaction.