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Viacom Chief Challenges Sumner Redstone’s Competency in Lawsuit Viacom Chief Challenges Sumner Redstone’s Competency in Lawsuit
(about 4 hours later)
Philippe P. Dauman, chief executive of Viacom, took the battle over the future of Sumner M. Redstone’s $40 billion media empire to court on Monday. Philippe P. Dauman, chief executive of Viacom, struck back in court on Monday in the vicious battle over the future of Sumner M. Redstone’s $40 billion media empire.
In a lawsuit filed in the Commonwealth of Massachusetts Probate and Family Court, Mr. Dauman and George Abrams, a Viacom director, challenged their unexpected removals on Friday from the trust that will control Mr. Redstone’s media companies after he dies or is declared incompetent. In a lawsuit filed in Massachusetts, Mr. Dauman and George Abrams, a Viacom director, challenged their unexpected removal on Friday from the trust that will control Mr. Redstone’s media companies after he dies or is declared incompetent.
The suit seeks to block that action and also invalidate their removal as directors of the theater chain company National Amusements, through which Mr. Redstone controls his media conglomerate. The suit depicts Mr. Redstone, 92, as suffering “profound physical and mental illness” and under the undue influence of his long-estranged daughter, Shari Redstone, with whom he recently reconciled.
In statements on Monday, Mr. Dauman and Mr. Abrams challenged the capacity of Mr. Redstone, who is 92 and in poor health. Mr. Dauman also asserted that Mr. Redstone had been unduly influenced by his long-estranged daughter, Shari Redstone, with whom he had recently reconciled. The legal action seeks to immediately block the removal of Mr. Dauman and Mr. Abrams from the trust and also invalidate their removal as directors of the theater chain company National Amusements, through which Mr. Redstone controls his media conglomerate.
“Shari Redstone is attempting to illegally hijack her father’s well-established estate plan by removing professional managers and reportedly installing her daughter, an employee and a friend who are firmly under her control,” Mr. Dauman said. The 24-page suit, filed Monday morning in the Commonwealth of Massachusetts Probate and Family Court in Norfolk, puts a renewed focus on the question of Mr. Redstone’s mental capacity. In November, a former companion of Mr. Redstone filed suit alleging that he was not competent and was under the influence of his daughter when he removed the companion, Manuela Herzer, from a directive that would have given her supervision of his health care. That suit was dismissed two weeks ago, in favor of Mr. Redstone.
“After years of estrangement, she has inserted herself into his home, taken over his life, and isolated him from anyone not under her control, including longtime business colleagues,” he added. “Shari’s actions amount to an unlawful corporate takeover, and if effectuated, could have far-reaching consequences for thousands of shareholders and employees of Viacom.” Mr. Dauman testified to Mr. Redstone’s engagement and attentiveness during the course of that legal battle.
Representatives for Mr. Redstone and Ms. Redstone could not immediately be reached for comment. Now, after his ouster from the trust and the board of National Amusements, Mr. Dauman is making a similar claim: that Mr. Redstone lacked the capacity to make those decisions and was manipulated by his daughter.
The claims came after a bitter weekend of feuding, ignited on Friday when Mr. Redstone unexpectedly ousted Mr. Dauman and Mr. Abrams from the trust. The suit filed Monday asserts that Mr. Redstone’s physical and mental health has declined precipitously in the past six months and that he is entirely dependent on his daughter for food, care and medicine.
It details how Mr. Redstone, who has not been seen publicly for nearly a year, can no longer stand, walk, read, write or speak coherently. According to the suit, he cannot swallow and requires a feeding tube to eat and drink and the suctioning of phlegm and saliva throughout the day and night to avoid breathing complications.
Mr. Dauman and Mr. Abrams claim in the suit that Mr. Redstone’s ability to “understand and assess the consequences of his actions is limited.”
The suit also alleges that Ms. Redstone made changes to Mr. Redstone’s last will and testament, including Ms. Redstone’s appointment in April to a directive that would give her supervision of her father’s health care decisions. The suit states that there have been other undisclosed changes to Mr. Redstone’s will in the last week.
“After years of estrangement, she has inserted herself into his home, taken over his life and isolated him from anyone not under her control, including longtime business colleagues,” Mr. Dauman said in a statement on Monday. “Shari’s actions amount to an unlawful corporate takeover, and if effectuated, could have far-reaching consequences for thousands of shareholders and employees of Viacom.”
Representatives for Mr. Redstone and Ms. Redstone could not immediately be reached for comment after the suit was filed.
In an statement issued earlier on Monday, Nancy Sterling, a spokeswoman for Ms. Redstone, said it was “absurd for anyone to accuse Shari of manipulating her father.”
“Sumner makes his own decisions regarding whom he wants to see, both in his home and elsewhere, and he has his own team of independent advisers to counsel him on corporate and other matters.”
The declaration of war in the Redstone empire came after a bitter weekend of feuding, ignited on Friday when Mr. Redstone unexpectedly ousted Mr. Dauman and Mr. Abrams from the trust and the board of National Amusements.
Through National Amusements, Mr. Redstone controls about 80 percent of the voting stock in Viacom and CBS, two of the world’s largest entertainment companies.Through National Amusements, Mr. Redstone controls about 80 percent of the voting stock in Viacom and CBS, two of the world’s largest entertainment companies.
Mr. Abrams, an ally of Mr. Dauman, had been a representative of Mr. Redstone’s for 50 years and also was on the Viacom board for 29 years. Mr. Abrams, an ally of Mr. Dauman, had been a representative of Mr. Redstone’s father and has been a friend and representative of Mr. Redstone for 50 years. He also had been a Viacom director for nearly 30 years.
In a statement, Mr. Abrams said: “My sole purpose in joining in this lawsuit is to allow a court to determine whether Sumner Redstone, in his current diminished capacity, has been subject to undue influence in his recent actions in changing his trustees and in changing other documents.” In a statement on Monday, Mr. Abrams said that over the last 25 years, Mr. Redstone had discussed his will and various trusts with him and that he was “instrumental in setting up this trust at the time of his divorce.” Mr. Abrams said the developments over the weekend “would alter his previously and repeatedly expressed wishes” that the trust be managed professionally and that his grandchildren be treated equally despite family conflicts.
Mr. Abrams added that over the last 25 years, Mr. Redstone discussed his will and various trusts with him and that he was “instrumental in setting up this trust at the time of his divorce.” Mr. Abrams said that the developments over the weekend “would alter his previously and repeatedly expressed wishes.” The weekend’s developments were considered a major victory for Ms. Redstone in her quest to shape the future of her father’s media companies. Ms. Redstone is a director of National Amusements, a member of the trust, and the vice chairwoman of Viacom and CBS.
“As a result of some of the information which has recently been received, I believe a court test on the question of undue influence is necessary,” Mr. Abrams said. Ms. Redstone has publicly opposed Mr. Dauman’s leadership of Viacom; she was the sole Viacom director in February to vote against his elevation to chairman when her father ceded the title. Viacom has reported persistently weak earnings, and its stock price has plunged about 40 percent in the last year.
The weekend’s developments were considered a major victory for Ms. Redstone, who has publicly opposed Mr. Dauman’s leadership of Viacom. The company has reported persistently weak earnings, and its stock price has plunged about 40 percent in the last year.
In an earlier statement on Monday, a spokeswoman for Ms. Redstone said it was “absurd for anyone to accuse Shari of manipulating her father.”
“Sumner makes his own decisions regarding whom he wants to see both in his home and elsewhere, and he has his own team of independent advisers to counsel him on corporate and other matters,” said Nancy Sterling, a spokeswoman for Ms. Redstone.
The trust, intended to benefit Mr. Redstone’s five grandchildren, wields enormous power. The seven voting members could move to oust the boards and leadership of Viacom and CBS and also make plans to merge or sell the companies.The trust, intended to benefit Mr. Redstone’s five grandchildren, wields enormous power. The seven voting members could move to oust the boards and leadership of Viacom and CBS and also make plans to merge or sell the companies.
A spokesman for Mr. Redstone on Sunday attested to Mr. Redstone’s vitality and independence in making the decision to remove Mr. Dauman and Mr. Abrams from the trust and the board of National Amusements. Monday’s lawsuit asserts that the changes to the trust and the board will allow Ms. Redstone to “illegitimately tip the balance of power to her.”
Mr. Redstone was “engaged, attentive, and as opinionated as ever,” Mike Lawrence, the spokesman, said a statement. He pulled the phrase directly from a declaration that Mr. Dauman made six months ago as part of a suit in a Los Angeles court over Mr. Redstone’s competency that was filed by his former companion, Manuela Herzer. The suit claims that the people put forward to replace them on the trust and the board are under the influence and control of Ms. Redstone.
That suit was dismissed two weeks ago. While the judge sided with Mr. Redstone, he did not make a decision on Mr. Redstone’s competency. It also calls into questions whether Mr. Redstone’s legal representation is legitimate. It states that Michael C. Tu, a partner at the law firm Orrick, Herrington & Sutcliffe, has refused to disclose whether he had ever met Mr. Redstone and asserts that statements that Mr. Tu made to the media related to Viacom business activities were false.
Mr. Tu could not immediately be reached for comment.
In a statement on Sunday, a spokesman for Mr. Redstone said that he was “engaged, attentive, and as opinionated as ever,” pulling the phrase directly from a declaration that Mr. Dauman made six months ago as part of the suit filed by his former companion, Ms. Herzer. The statement made clear that Mr. Redstone’s lawyers will seek to use Mr. Dauman’s own words against him as they assert that Mr. Redstone had the mental capacity to make the decision to remove the Viacom chief.
While the judge sided with Mr. Redstone in the Herzer case, he did not make a decision on Mr. Redstone’s competency.
According to the new lawsuit filed Monday, Mr. Redstone’s physical and mental health has diminished significantly since Ms. Herzer’s suit was filed in November.
Mr. Dauman visited Mr. Redstone during the first week of March, according to the suit. During the visit, Mr. Redstone “appeared almost totally nonresponsive, and could not meaningfully communicate at all.”
Mr. Redstone turns 93 on Friday.