Sumner Redstone asks court to reject lawsuit by Viacom CEO

Laura Christensen
June 8, 2016

Redstone has asked a MA court to reject a challenge by Viacom's chief executive Philippe Dauman, who's suing Redstone seeking reinstatement as a director and trustee to entities that control Viacom and CBS Corp.

The independent directors have questioned Sumner Redstone's mental competence, and said they would legally contest any move by his purported representatives to remove them from Viacom's board. He is a 93-year-old man suffering from overwhelming physical ailments, including an inability to speak, stand, walk, eat, write or read. They have likewise countered in court filings with statement from a physician who analyzed the elderly Redstone and discovered the billionaire had the mental capacity had to take Dauman and Abrams off his trust.

Meanwhile, Dauman and Abrams sought in a MA court to speed up their battle against being dismissed as trustees of Redstone's National Amusements Trust, which controls National Amusements Inc.

A hearing on Dauman and Abrams' request to hold a trial by the end of September is scheduled for Tuesday in Canton. Attorneys for daughter Shari Redstone said they would file by June 16 a motion to dismiss Dauman's case.

The duo are engaged in an "acutely self-interested" effort "to secure their tenuous positions with Viacom", today's filing from Redstone's lawyers says.

National Amusements Inc., the company through which Mr. Redstone controls Viacom, on Monday said it has amended the media company's bylaws to require unanimous board approval of a strategic transaction involving Paramount.

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Shari Redstone has said her father made his own decisions.

The support of four of seven trustees means Dauman and Abrams will be off the trust, and off the board of Redstone's National Amusements holding company, even if they prevail in their lawsuit challenging their removal, according to Redstone's Friday filing opposing an expedited trial.

A spokesperson for Shari Redstone was not immediately available for comment. Redstone controls about 80 per cent of the voting shares of Viacom through those entities.

Fagen told Phelan on Tuesday that while the trust agreement doesn't define the term "undue influence", the burden of proof is on Shari to disprove it. Redstone's trust agreement is private. "They are clearly meant to impede the ability of the Viacom Board of Directors to fulfill its obligations to all stockholders, including the public non-controlling stockholders who own 90% of the equity of Viacom".

Lawyers for Dauman and Abrams contend that Redstone is mentally incapacitated, and that his daughter, Shari, is taking advantage of his poor health to vote out his most trusted confidantes. Soon afterward, Redstone removed Dauman from his trust, and could soon move to oust him from the top job at Viacom as well.

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