California's attorney general has scrapped a scheduled meeting with Paramount representatives, accusing the company of leaking and misrepresenting prior settlement talks. The move escalates tensions in a legal battle over the proposed $111 billion acquisition of Warner Bros. Discovery.

Rob Bonta, who is leading a coalition of 12 states in a lawsuit to block the transaction, cancelled the Monday session late Sunday, citing a lack of good faith from Paramount. In a statement, Bonta said the company disclosed details from a Friday discussion and twisted their meaning. "Paramount not only leaked the alleged substance of the settlement discussions, but also distorted them, which demonstrates a lack of good faith," he said. "Once Paramount stops playing games and engages sincerely, my office will be happy to meet again."

A Paramount spokesperson had no immediate comment on Monday morning. The planned meeting was meant as an initial outreach and never carried a guarantee of leading to substantive negotiations. Still, the prospect of both sides moving toward an agreement had been viewed as a potential breakthrough, especially after Paramount earlier threatened to leave California and Governor Gavin Newsom expressed a preference for resolving the case out of court.

The proposed $111 billion takeover would create a media powerhouse, combining two major film studios, multiple streaming platforms, and news operations such as CNN and CBS News. Paramount, headquartered in Hollywood, also stands as a significant employer in Los Angeles. Last month, California spearheaded a lawsuit with 11 other states to halt the deal, arguing it would create a company with excessive market power in cable television and movie production.

Bonta has previously stated he would only accept structural remedies to settle the case, a move that typically requires the company to sell off parts of the merged business. Executives often resist divesting portions of a newly combined entity because they have already built financial assumptions around the integrated operations. The case is scheduled for trial in March, and if the deal fails to close by October, the company could face hundreds of millions in fees owed to Warner Bros. shareholders.

Political pressure for a resolution is intensifying. Los Angeles Mayor Karen Bass said last week that the controversy surrounding the merger has stalled production and caused job losses in Hollywood, urging a "swift and urgent resolution" to the lawsuit. Democratic gubernatorial candidate Xavier Becerra also voiced support this month for settling the case. Outgoing Governor Newsom, who is weighing a potential 2028 presidential run, said Friday he takes Paramount's threat to leave the state seriously. "I worry about the reputation of my state," he said. "I want Hollywood to thrive."