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UNIVERSAL STUDIOS INC. v. VIACOM INC.

Civil Action Nos. 14971, 14973.

705 A.2d 579 (1997)

UNIVERSAL STUDIOS INC., a Delaware corporation, and Universal City Studios Inc., Plaintiffs, v. VIACOM INC., a Delaware corporation, Viacom International, Inc. (successor by merger to Paramount Communications Inc.), a Delaware corporation, and Eighth Century Corporation, a Delaware corporation, Defendants. VIACOM INC. and Eighth Century Corporation, Plaintiffs, v. The SEAGRAM COMPANY LTD., Universal Studios Inc. and Universal City Studios Inc. Defendants.

Court of Chancery of Delaware, New Castle County.

Decided: May 15, 1997.

Attorney(s) appearing for the Case

Bruce M. Stargatt, David C. McBride, and Josy W. Ingersoll of Young, Conaway, Stargatt & Taylor, Wilmington (Herbert M. Wachtell, Michael W. Schwartz, Rachelle Silverberg and Gregory P. Taxin of Wachtell, Lipton, Rosen & Katz, New York City, Ronald Olson, Glenn D. Pomerantz and Allison Stein of Munger, Tolles & Olsen, Los Angeles, CA, of counsel), for Universal Studios Inc., The Seagram Company, Ltd. and Universal City Studios, Inc.

Rodman Ward and Anthony Clark of Skadden, Arps, Slate, Meagher & Flom, Wilmington (Robert E. Zimet, Samuel Kadet, Seth M. Schwartz of Skadden, Arps, Slate, Meagher & Flom, New York City, of counsel), for Viacom Inc., Viacom International Inc. and Eighth Century Corp.

OPINION

STEELE, Vice Chancellor.

I. Issue Presented

Several entertainment industry leaders join forces in order to explore the as-yet unknown potential of a new business — cable television. They agree to channel their efforts and resources in this area solely through their common enterprise. Some fifteen years later, the industry and their venture (the USA Networks) are a great and growing success. One of the two remaining original partners...

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