This case was last updated from U.S. District Courts on 03/12/2022 at 06:02:34 (UTC).

Rahman v. Discovery, Inc. et al

Case Summary

On November 23, 2021, ​​Opur Rahman (“Plaintiff’), represented by Evan J. Smith of Brodsky & Smith, L.L.C., filed a civil action against Discovery, David M. Zaslav ("Zaslav"), Robert R. Beck (“Beck"), Robert R. Bennett ("Bennett"), Paul A. Gould (“Gould”), and Ors. (collectively, “Defendants”) seeking injunctive relief and costs among other relief for the alleged unfair proposed transaction of Defendants. This case was filed in the U.S. District Court in the Southern District of New York. 

 

In the complaint Plaintiff alleged that, “Plaintiff brings this stockholder action against Discovery, Inc. (“Discovery” or the “Company”) the Company’s Board of Directors (the “Board” or the “Individual Defendants,”) AT&T Inc. (“Parent”), through Drake Subsidiary, Inc. (“Merger Sub”, and together with Parent, “AT&T,” and with Discovery and Individual Defendants, the “Defendants”) for violations of Sections 14(a) and 20(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”) as a result of the Individual Defendants’ efforts to sell the Company to AT&T ”) as a result of an unfair process, and to enjoin an upcoming stockholder vote on a proposed stock issuance relating to the merger (the “Proposed Transaction”).The terms of the Proposed Transaction were memorialized in a May 20, 2021 filing with the Securities and Exchange Commission (“SEC”) on Form 8-K attaching the definitive Agreement and Plan of Merger (the “Merger Agreement”).”

 

Plaintiff further alleged that, “Under the terms of the Merger Agreement, AT&T will be entitled to receive a newly issued shares in Discovery, where, when completed, as a shareholder as the Company, the Plaintiff s interests will be significantly diluted. In fact, under the terms of the Merger Agreement, Discovery shareholders will own only approximately 29% of the surviving entity created by the Proposed Transaction. Thereafter, on November 18, 2021, Discovery filed a Registration Statement on Form S-4 (the “Registration Statement”) with the SEC in support of the Proposed Transaction. The Proposed Transaction is unfair for a number of reasons. Significantly, the dubious nature of the stock issuance at the heart of the Proposed Transaction is laid bare considering the extreme dilutive effect that the Proposed Transaction will have on Plaintiffs Company stock.”

 

Plaintiff also alleged that, “In violation of the Exchange Act, Defendants caused to be filed the materially deficient Registration Statement on November 18, 2021 with the SEC in an effort to secure Plaintiffs vote in favor of the Proposed Transaction. The Registration Statement is materially deficient, deprives Plaintiff of the information necessary to make an intelligent, informed and rational decision of whether to vote in favor of the Proposed Transaction, and is thus in violation of the Exchange Act.”

 

There are two claims for relief laid down by Plaintiff. The first claim deals with the alleged violations of Section 14(a) of the Exchange Act. The second claim deals with the alleged violations of Section 20(a) of the Exchange Act. 

 

In its prayer for relief Plaintiff has requested the court to enjoin the proposed transaction, direct the individual defendants to comply with the Exchange Act, and award Plaintiff the costs and reasonable allowance for Plaintiff’s attorneys, along with such other and further relief as the court may deem just and proper. 

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    1:21-CV-09785

  • Filing Date:

    11/23/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

Judge Details

Presiding Judge

P. Kevin Castel

 

Party Details

Plaintiff

Opur Rahman

Defendants

Discovery, Inc.

AT&T, Inc.

Drake Subsidiary, Inc.

David M. Zaslav

Robert R. Beck

Robert R. Bennett

Paul A. Gould

Robert L. Johnson

Kenneth W. Lowe

John C. Malone

Robert J. Miron

Steven A. Miron

Daniel E. Sanchez

Susan M. Swain

J. David Wargo

Attorney/Law Firm Details

Plaintiff Attorney

Evan J. Smith

Attorney at Brodsky & Smith, L.L.C.

240 Mineola Blvd.

Mineola, NY 11501

Defendant Attorneys

Robert Andrew Sacks

Attorney at Sullivan & Cromwell LLP (Los Angeles)

1888 Century Park East, Suite 2100

Los Angeles, CA 90067

Leonid Traps

Attorney at Sullivan & Cromwell, LLP (NYC)

125 Broad Street

New York, NY 10004

 

Court Documents

#1

(#1) COMPLAINT against AT&T, Inc., Robert R. Beck, Robert R. Bennett, Discovery, Inc., Drake Subsidiary, Inc., Paul A. Gould, Robert L. Johnson, Kenneth W. Lowe, John C. Malone, Robert J. Miron, Steven A. Miron, Daniel E. Sanchez, Susan M. Swain, J. David Wargo, David M. Zaslav. (Filing Fee $ 402.00, Receipt Number ANYSDC-25376071)Document filed by Opur Rahman..(Smith, Evan) (Entered: 11/23/2021)

#2

(#2) CIVIL COVER SHEET filed..(Smith, Evan) (Entered: 11/23/2021)

#3

(#3) RULE 7.1 CORPORATE DISCLOSURE STATEMENT. No Corporate Parent. Document filed by Opur Rahman..(Smith, Evan) (Entered: 11/23/2021)

#4

(#4) REQUEST FOR ISSUANCE OF SUMMONS as to Discovery, Inc., David M. Zaslav, Robert R. Beck, Robert R. Bennett, Paul A. Gould, Robert L. Johnson, Kenneth W. Lowe, John C. Malone, Robert J. Miron, Steven A. Miron, Daniel E. Sanchez, Susan M. Swain, J. David Wargo, and Drake Subsidiary, Inc., re: #1 Complaint,. Document filed by Opur Rahman..(Smith, Evan) (Entered: 11/23/2021)

#5

(#5) REQUEST FOR ISSUANCE OF SUMMONS as to AT&T, Inc., re: #1 Complaint,. Document filed by Opur Rahman..(Smith, Evan) (Entered: 11/23/2021)

#6

(#6) ELECTRONIC SUMMONS ISSUED as to Robert R. Beck, Robert R. Bennett, Discovery, Inc., Drake Subsidiary, Inc., Paul A. Gould, Robert L. Johnson, Kenneth W. Lowe, John C. Malone, Robert J. Miron, Steven A. Miron, Daniel E. Sanchez, Susan M. Swain, J. David Wargo, David M. Zaslav. (sj) (Entered: 11/24/2021)

#7

(#7) ELECTRONIC SUMMONS ISSUED as to AT&T, Inc.. (sj) (Entered: 11/24/2021)

#8

(#8) ORDER INITIAL PRETRIAL CONFERENCE: Initial Conference by telephone set for 1/28/2022 at 12:00 PM before Judge P. Kevin Castel. The call-in information for all teleconferences is: Dial-in: (888) 363-4749 Access Code: 3667981. SO ORDERED. (Signed by Judge P. Kevin Castel on 12/7/2021) (vfr) (Entered: 12/07/2021)

#9

(#9) NOTICE OF APPEARANCE by Robert Andrew Sacks on behalf of AT&T, Inc...(Sacks, Robert) (Entered: 01/10/2022)

#10

(#10) NOTICE OF APPEARANCE by Leonid Traps on behalf of AT&T, Inc...(Traps, Leonid) (Entered: 01/10/2022)

#11

(#11) PROPOSED STIPULATION AND ORDER. Document filed by AT&T, Inc...(Sacks, Robert) (Entered: 01/10/2022)

#12

(#12) STIPULATION AND ORDER: NOW THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by and between the undersigned parties, through their undersigned counsel, that: 1. By entering into this stipulation, Defendants accept service of the Complaint in this action and expressly reserve all of their respective rights, claims and defenses, other than a defense to the sufficiency of service of the Complaint. 2. Defendants need not answer, move to dismiss, or otherwise respond to the Complaint until the earlier of (i) 30 days after the challenged merger transaction closes, or (ii) July 31, 2022. The Initial Pretrial Conference and the associated deadlines are continued to such other dates and times that this Court shall order. The parties shall advise the Court of the need for an Initial Pretrial Conference immediately upon the occurrence of 2(i) or 2(ii). SO ORDERED. (Signed by Judge P. Kevin Castel on 1/11/2022) (ama) (Entered: 01/11/2022)

 

Docket Entries

  • 01/11/2022
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  • Docket(#12) STIPULATION AND ORDER: NOW THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by and between the undersigned parties, through their undersigned counsel, that: 1. By entering into this stipulation, Defendants accept service of the Complaint in this action and expressly reserve all of their respective rights, claims and defenses, other than a defense to the sufficiency of service of the Complaint. 2. Defendants need not answer, move to dismiss, or otherwise respond to the Complaint until the earlier of (i) 30 days after the challenged merger transaction closes, or (ii) July 31, 2022. The Initial Pretrial Conference and the associated deadlines are continued to such other dates and times that this Court shall order. The parties shall advise the Court of the need for an Initial Pretrial Conference immediately upon the occurrence of 2(i) or 2(ii). SO ORDERED. (Signed by Judge P. Kevin Castel on 1/11/2022) (ama) (Entered: 01/11/2022)

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  • 01/10/2022
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  • Docket(#11) PROPOSED STIPULATION AND ORDER. Document filed by AT&T, Inc...(Sacks, Robert) (Entered: 01/10/2022)

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  • 01/10/2022
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  • Docket(#10) NOTICE OF APPEARANCE by Leonid Traps on behalf of AT&T, Inc...(Traps, Leonid) (Entered: 01/10/2022)

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  • 01/10/2022
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  • Docket(#9) NOTICE OF APPEARANCE by Robert Andrew Sacks on behalf of AT&T, Inc...(Sacks, Robert) (Entered: 01/10/2022)

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  • 12/07/2021
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  • Docket(#8) ORDER INITIAL PRETRIAL CONFERENCE: Initial Conference by telephone set for 1/28/2022 at 12:00 PM before Judge P. Kevin Castel. The call-in information for all teleconferences is: Dial-in: (888) 363-4749 Access Code: 3667981. SO ORDERED. (Signed by Judge P. Kevin Castel on 12/7/2021) (vfr) (Entered: 12/07/2021)

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  • 11/24/2021
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  • Docket(#7) ELECTRONIC SUMMONS ISSUED as to AT&T, Inc.. (sj) (Entered: 11/24/2021)

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  • 11/24/2021
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  • Docket(#6) ELECTRONIC SUMMONS ISSUED as to Robert R. Beck, Robert R. Bennett, Discovery, Inc., Drake Subsidiary, Inc., Paul A. Gould, Robert L. Johnson, Kenneth W. Lowe, John C. Malone, Robert J. Miron, Steven A. Miron, Daniel E. Sanchez, Susan M. Swain, J. David Wargo, David M. Zaslav. (sj) (Entered: 11/24/2021)

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  • 11/24/2021
  • DocketCase Designated ECF. (sj) (Entered: 11/24/2021)

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  • 11/24/2021
  • DocketMagistrate Judge Stewart D. Aaron is so designated. Pursuant to 28 U.S.C. Section 636(c) and Fed. R. Civ. P. 73(b)(1) parties are notified that they may consent to proceed before a United States Magistrate Judge. Parties who wish to consent may access the necessary form at the following link: #https://nysd.uscourts.gov/sites/default/files/2018-06/AO-3.pdf. (sj) (Entered: 11/24/2021)

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  • 11/24/2021
  • DocketCASE OPENING INITIAL ASSIGNMENT NOTICE: The above-entitled action is assigned to Judge P. Kevin Castel. Please download and review the Individual Practices of the assigned District Judge, located at #https://nysd.uscourts.gov/judges/district-judges. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. Please download and review the ECF Rules and Instructions, located at #https://nysd.uscourts.gov/rules/ecf-related-instructions..(sj) (Entered: 11/24/2021)

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  • 11/23/2021
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  • Docket(#5) REQUEST FOR ISSUANCE OF SUMMONS as to AT&T, Inc., re: #1 Complaint,. Document filed by Opur Rahman..(Smith, Evan) (Entered: 11/23/2021)

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  • 11/23/2021
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  • Docket(#4) REQUEST FOR ISSUANCE OF SUMMONS as to Discovery, Inc., David M. Zaslav, Robert R. Beck, Robert R. Bennett, Paul A. Gould, Robert L. Johnson, Kenneth W. Lowe, John C. Malone, Robert J. Miron, Steven A. Miron, Daniel E. Sanchez, Susan M. Swain, J. David Wargo, and Drake Subsidiary, Inc., re: #1 Complaint,. Document filed by Opur Rahman..(Smith, Evan) (Entered: 11/23/2021)

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  • 11/23/2021
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  • Docket(#3) RULE 7.1 CORPORATE DISCLOSURE STATEMENT. No Corporate Parent. Document filed by Opur Rahman..(Smith, Evan) (Entered: 11/23/2021)

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  • 11/23/2021
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  • Docket(#2) CIVIL COVER SHEET filed..(Smith, Evan) (Entered: 11/23/2021)

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  • 11/23/2021
  • View Court Documents
  • Docket(#1) COMPLAINT against AT&T, Inc., Robert R. Beck, Robert R. Bennett, Discovery, Inc., Drake Subsidiary, Inc., Paul A. Gould, Robert L. Johnson, Kenneth W. Lowe, John C. Malone, Robert J. Miron, Steven A. Miron, Daniel E. Sanchez, Susan M. Swain, J. David Wargo, David M. Zaslav. (Filing Fee $ 402.00, Receipt Number ANYSDC-25376071)Document filed by Opur Rahman..(Smith, Evan) (Entered: 11/23/2021)

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