The fight for control of Sumner Redstone’s Viacom is headed for a court case.
A Massachusetts court has ruled that Viacom CEO Philippe Dauman lead board director George Abrams can make their case against parent company National Amusements during a trial in October.
A judge denied a motion taken to strike the suit, which aims to see Dauman and Abrams reinstated to the board of National Amusements, which controls Viacom and CBS through voting shares; and to a trust that will oversee the aged Redstone’s assets when he passes away or is incapacitated.
However, Judge George Phelan ruled Redstone would not need an immediate medical examination to prove his mental faculties. The suit had claimed Redstone was no longer making his own decisions, and was instead being manipulated by his daughter, Shari Redstone, who is Viacom’s deputy-chairman.
A trial that will determine the future of Viacom has been fast-tracked for October, with the judge looking over Sumner Redstone’s medical records in the mean time.
Redstone’s team suggests his mental capabilities are irrelevant to the case, as the trust has already indicated it would majority-vote to uphold the axing of Dauman and Abrams.
“We are grateful that Judge Phelan’s thoughtful opinion removes yet another of defendants’ efforts to block an investigation into the merits and, in particular, an independent determination of Mr. Redstone’s capacity and the question of undue influence said a spokesman for Dauman and Abrams. “We welcome the opportunity to prove the facts at trial.”
Mike Lawrence, a Redstone spokesman, issued a statement describing the case as a “disingenuous, self-interested effort by Philippe Dauman and George Abrams to hold on to their power as trustees and National Amusements directors, in the hope that this would enable them to preserve their richly compensated positions at Viacom despite their dismal performance”.
Viacom’s stock has plunged in the past year, with shareholders’ concerns over poor cable ratings and Dauman’s pay packets growing (his 2015 remuneration was US$54 million, 22% higher than a year prior despite the stock significantly underperforming).
Redstone’s camp thanked Judge Phelan for “protecting Sumner Redstone’s privacy and dignity” by denying the mental examination, and, referring to a previous court case, added: “We look forward to exposing this specious and malicious attack on the Redstones, and we believe that Mr. Dauman and Mr. Abrams will be no more successful at thwarting Sumner’s wishes in Massachusetts than Manuela Herzer was in California.”
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