Time Warner-Paramount (B)

Addresses the legal and corporate governance aspects of the decision by the Board of Directors of Time, Inc. to abandon an agreement to merge with Warner Communications in a stock-for-stock deal, and instead to buy Warner for cash in a highly leveraged transaction designed to thwart a hostile tender offer for Time by Paramount Communications. Raises the issues of whether the board of directors of a publicly held corporation may appropriately pursue a strategy opposed by a majority of the shareholders, and whether a board of directors is obligated to abandon an in-place plan to corporate development in order to provide its shareholders the option to elect and realize an immediate control premium. Paramount is preparing to appeal a trial-court decision upholding the actions of the Time board.