Paramount Communications, Inc. v. QVC Network, Inc.
Paramount Communications, Inc. v. QVC Network, Inc. (Delaware Supreme Court, February 4, 1994) clarified when the Revlon duties apply in corporate takeovers. The case involved a proposed merger between Viacom and Paramount. Paramount had put in defensive measures for the deal, including a no-shop clause, a $100 million termination fee, and a lock-up on about 20% of Paramount’s stock. QVC then made its own bid, conditioning it on canceling these protections. Paramount’s board refused to run a formal auction, arguing it would breach its obligations to Viacom under the merger agreement.
The court held that when a sale of control is about to occur, directors face heightened scrutiny. They must seek the best value for shareholders, potentially requiring them to pursue the highest offer. This establishes the Revlon duties—the intensified duties that attach once control is to change hands—building on earlier Unocal guidance. In short, once a control sale is imminent, directors cannot simply protect the deal with defenses; they must actively pursue the best price for shareholders, even if that means entertaining rival bids.
This page was last edited on 3 February 2026, at 18:50 (CET).