It started off typically enough. A year ago, as the merger between David Zaslav’s Discovery Communications and AT&T’s WarnerMedia was about to give birth to the corporate entity known as Warner Bros. Discovery, some Delaware lawyers began recruiting clients and making “Section 220 demands”—firm but polite requests under Delaware corporate law to inspect the books of the merging entities. Depositions were taken, and in December, class action complaints were filed, initially under seal, that alleged the media behemoth’s formation gave investors short shrift. A legal challenge will now proceed just as the company begins to make good on Zaz’s promises to Wall Street analysts.
But not every court battle is between plaintiff and defendant. Here, before this case even gets anywhere, the plaintiffs are clawing at each other. Currently, after the formation of Survivor-style alliances, two competing groups are vying in Delaware’s Court of Chancery to take the lead position in the consolidated class action. A judge will now choose between two vastly different visions about where this case should go. That’s because each has a wildly different take on how last year’s marriage of Discovery and WarnerMedia pulled a fast one on shareholders.
And it’s getting nasty. One side argues that the other is pursuing an “inferior,” “sue ‘em all” strategy that rests on proving a nonsensical, “all-encompassing conspiracy.” That’s just “sour grapes,” responds the other group, dumping on its opponents for “fail[ing] to grasp” malfeasance as clear as day. What’s really going on, they claim, is that these other so-called lawyers “take umbrage at the threat to their sense of incumbency.” Like an unruly meeting of a college debate club, they’re viciously picking apart each other’s arguments—and, presumably, handing WBD ammo to defeat whichever side emerges triumphant.