Judge greenlights second suit against Sumner Redstone
Media mogul Sumner Redstone better enjoy a summer vacation because fall is going to be busy.
Viacom’s 93-year-old controlling shareholder is facing two trials in two states come October that could determine the fate of his $40 billion media empire — and a third court has reserved the right to weigh in on the legal drama.
A Delaware judge ruled on Friday that the lawsuit over Redstone’s move to replace five Viacom directors would go to trial and set Oct. 17 as the start date.
Judge Andre Bouchard also indicated that he would allow a medical examination of the ailing 93-year-old Redstone to determine whether he was mentally capable of making such decisions.
A day earlier, a Massachusetts judge upheld a suit by Viacom CEO Philippe Dauman and fellow director George Abrams challenging Redstone’s effort to remove them from a family trust and the board of National Amusements Inc., which holds the mogul’s controlling stakes in Viacom and CBS. That case is also on track for an October trial.
Meanwhile, a Los Angeles judge has set an Oct. 18 hearing in yet another fight over the tycoon’s affairs — this one involving his former live-in gal pal Manuela Herzer.
On Friday, lawyers for Redstone and NAI asserted in Delaware court that they were within their rights when they moved in June to replace five Viacom directors, including Dauman.
Ousted director Fred Salerno acknowledged that Redstone has the right to unseat directors in normal circumstances. But in this instance, Salerno claims, Redstone lacked the mental capacity to grasp what he has doing.
Salerno alleges that Redstone was being “unduly influenced” by his daughter, Shari Redstone, in what amounted to an audacious power grab for Viacom, the owner of MTV, Comedy Central and Nickelodeon as well as the Paramount film studio.
Redstone and NAI countered that, since a majority of the holding company’s board ratified the dismissal of the five Viacom directors, Redstone’s mental capacity was immaterial. A majority would have prevailed, they argued, even if Dauman and Abrams hadn’t been kicked off the NAI board a month before they were removed from the Viacom board.
“Three of the [remaining] five would have ratified the act,” Redstone’s lawyer said. “The outcome would have been exactly the same.”
Judge Bouchard didn’t buy the notion that Redstone’s competency was irrelevant, especially since one of NAI’s five board members, Shari, was “allegedly doing the influencing.”
Salerno’s lawyer put a more nefarious spin on the written consents by which NAI’s board defended its ouster of the five Viacom directors.
“They’re arguing [Redstone] has capacity,” he said. But in a nod to the sinking line that passes for the mogul’s signature on the consents, he raised “fraud” as a possibility as well as manipulation of the mogul.
Bouchard directed all parties to coordinate discovery for the Delaware case with courts in Massachusetts and California.
“We’re going through the competency issue once — not three times,” he said.