Word: paramount
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Dates: during 1980-1989
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...reaching an almost unequivocal decision in the complex case, Allen dismissed a key Paramount claim, that Time's directors had put the company up for sale in March when they originally agreed to acquire Warner. If that had been found to be true, Time would have been obligated under Delaware law to seek the maximum immediate return to shareholders by auctioning the company to the highest bidder. Paramount's argument that Time's directors were selling the company to Warner rested partly on the fact that the exchange ratio of the proposed stock swap would have given Warner stockholders...
...another major point, Allen rejected Paramount's claim that Time acted improperly in revamping its Warner deal after the Paramount offer was made. The precedent in judging such tactics is a 1985 Delaware case involving an effort by the California oil company Unocal to escape a raid by takeover artist T. Boone Pickens. In that case, the court decided that companies may take defensive moves only if they are "reasonable," as Unocal's were deemed to be. Paramount argued that Time's decision to launch the tender offer for Warner was excessive in proportion to the takeover threat and thus...
...reasons for rejecting the Paramount bid, Time had asserted the necessity of preserving its corporate culture to ensure the editorial independence and freedom of its publications. While Allen stopped short of endorsing that concern as a primary basis for blocking a takeover bid, he indicated that the preservation of such ideals does carry weight. Wrote Allen: "This culture appears in part to be pride in the history of the firm -- notably TIME magazine and its role in American life -- and in part a managerial philosophy and distinctive structure that is intended to protect journalistic integrity from pressures from the business...
Allen noted that Paramount dismisses "this claim of 'culture' as being nothing more than a desire to perpetuate or entrench existing ((Time)) management disguised in a pompous, highfalutin' claim." Wrote he: "I understand the argument . . . But I am not persuaded that there may not be instances in which the law might recognize as valid a perceived threat to a 'corporate culture' that is shown to be palpable (for lack of a better word), distinctive and advantageous...
...judge also rejected Paramount's contention that Time executives were using the editorial-independence argument simply to entrench their positions. Wrote Allen: "There may be at work here a force more subtle than a desire to maintain a title or office. Many people commit a huge portion of their lives to a single large-scale business organization. They derive their identity in part from the organization and feel that they contribute to the identity of the firm. The mission of the firm is not seen by those involved with it as wholly economic, nor the continued existence of its distinctive...