There’s more turmoil in Sumner Redstone’s world: He has notified Viacom CEO Philippe Dauman and company director George Abrams that they are off the seven-member trust that would vote his controlling shares in National Amusements — and, by extension, in Viacom and CBS — when he passes or becomes incapacitated, Fortune magazine reports.
That would all but ensure that daughter Shari Redstone, who is vice chair of Viacom and CBS, would effectively control the 80% stakes in the media companies owned by the family’s National Amusements theater chain.
A spokesman for Dauman calls the efforts “invalid and illegal. They are a shameful effort by Shari Redstone to seize control by unlawfully using her ailing father Sumner Redstone’s name and signature. As she knows and as court proceedings and other facts have demonstrated, Sumner Redstone now lacks the capacity to have taken these steps. Sumner Redstone would never have summarily dismissed Philippe Dauman and George Abrams, his trusted friends and advisors for decades.”
Redstone’s lawyers sent faxes to Dauman and Abrams, and also alerted Viacom and CBS, Fortune says. He said that he wants his two long-time allies off the board of National Amusements as well as the trust.
He apparently has the ability to make that change if he’s deemed to be competent to make his own decisions. If he isn’t, then the makeup of the trust could only be changed by its members — or by his five grandchildren if they take the matter to court.
The trust is designed to benefit Redstone’s grandchildren and succeeding generations.
This new battle is taking place after a contentious court case in which Los Angeles Superior Court David Cowan ruled this month that Redstone “is presumed to have capacity” to change his health care directives.
Redstone’s former companion, Manuela Herzer, charged that he was a “living ghost” who was not capable of making a decision last year to take away her authority to make health care decisions on his behalf. Redstone turned that power over to Dauman, and it subsequently shifted to Shari.
The Viacom chief contended that Redstone, 92, was competent, noting that he had been “engaged and attentive” in a November business meeting. His statement today suggests he would now say that things have changed.
Redstone acknowledged his diminishing ability to manage Viacom and CBS by relinquishing his titles as Executive Chairman to become Chairman Emeritus. Both companies slashed his compensation for 2015, and Viacom this week cut his pay entirely for its 2016 fiscal year.
If Redstone loses his ability to make decisions, then a trust he created would replace him in deciding how to vote his interests in National Amusements. In addition to Dauman, Abrams, and Shari Redstone, the trust includes Sumner Redstone’s divorce lawyer Norman Jacobs, CBS and National Amusements board member David Andelman, Shari’s son Tyler Korff, and Leonard Lewin who is the divorce lawyer for Sumner’s former wife Phyllis.
The arrangement seemed to set up a power struggle between Dauman and Shari Redstone. Dauman was widely believed to have the support of Abrams and Jacobs, while Shari Redstone was seen as allied with Korff and Lewin. Andelman was considered the wild card who could tip the balance.
Shari Redstone and Dauman also had publicly clashed over power: She was the sole “no” vote on the Viacom board when it decided in February to give Dauman the Executive Chairman job after Sumner Redstone became Chairman Emeritus.
She said at the time that her father’s replacement “should be someone who is not a Trustee of my father’s trust or otherwise intertwined in Redstone family matters.” She supported a move at CBS to make CEO Les Moonves, who isn’t a trustee, the broadcast company’s chairman.