In a dramatic escalation of the long-simmering tensions between CBS and controlling shareholder National Amusements, CBS and the Special Committee of its Board of Directors have filed a lawsuit looking to slash NAI’s controlling stake. While the near-term goal is to scuttle the proposed merger of CBS and Viacom, CBS says it seeks to operate as “an independent, non-controlled company,” with more strategic options down the line.

The suit (read it here) in Delaware Court of Chancery alleges breaches of fiduciary duty by National Amusements, the controlling shareholder of both CBS and Viacom. Shari Redstone, who runs National Amusements, has been locked in a struggle with CBS chairman and CEO Leslie Moonves over the company’s merger talks with Viacom. The flare-up comes on an already momentous week for CBS, which is holding its annual upfront presentation to advertisers on Wednesday and convening its annual shareholder meeting Friday.

The lawsuit seeks to prevent National Amusements from interfering with a special meeting of the board of directors. At the meeting, the directors will consider declaring a dividend of shares of Class A common stock to all of the Company’s Class A and Class B stockholders, as is permitted under CBS’ charter. The dividend would dilute the voting interest of National Amusements from its current level of about 79% to 17%. It would not dilute the economic interests of any CBS stockholder, the company said.

Redstone had reportedly indicated she would consider ousting Moonves and the entire CBS board if they stood in the way of the merger. One point of contention is the role that Redstone’s hand-picked CEO of Viacom, Bob Bakish, would play in the combined company. Moonves, who would run the re-merged entity, has favored CBS Chief Operating Officer Joe Ianniello over Bakish as his No. 2.

Wall Street reacted to the lawsuit by boosting CBS stock by 4%, while Viacom’s took a hit, dropping nearly 7% in morning trading. Many analysts in recent weeks have observed that Viacom needs the merger more than CBS. Viacom has been attempting to crawl out of a deep hole with a portfolio of cable networks, including MTV, Nickelodeon and Comedy Central, that has been hurt by cord-cutting and other disruptions to the traditional bundle. While CBS is experiencing similar headwinds, Moonves and his team have increased revenue from retransmission consent and content licensing. It has also debuted stand-alone streaming networks like CBS All-Access as hedges against live linear ratings erosion.

Reps from Viacom and National Amusements did not immediately respond to Deadline’s requests for comment.

The suit argues that National Amusements’ control derives from the company’s dual-class stock structure, not NAI’s economic ownership. A motion for a temporary restraining order looks to keep Redstone “from abusing NAI’s voting control and further harming CBS and its public stockholders in breach of their fiduciary duties,” according to the documents.

CBS is also demanding a May 17 board meeting to “discuss ways in which the Board may protect the Company against Ms. Redstone moving forward, including the potential issuance of a stock dividend that would dilute NAI’s voting power.” That gathering would come one day after CBS holds its customarily lavish upfronts presentation at New York’s Carnegie Hall, showcasing its upcoming TV season to deep-pocketed advertisers, with an after-party at the Plaza Hotel.

“The Special Committee has taken this step because it believes it is in the best interests of all CBS stockholders, is necessary to protect stockholders’ interests and would unlock significant stockholder value,” the company said in a press release. “If consummated, the dividend would enable the company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives.”

CBS and Viacom were corporate siblings from 2000-2006. Since splitting, their fortunes have diverged in ways not envisioned by National Amusements founder and longtime chairman Sumner Redstone, Shari’s father. CBS after the separation became the most-watched broadcast network and has had a nearly two-decade run of ratings dominance.

Citing marketplace consolidation, Shari Redstone has long sought to recombine the companies, which have been holding formal merger talks since February. The main sticking points have been the management team and the value in the deal from the CBS side given the significant struggles at Viacom in recent years.