A Massachusetts Probate and Family Court hearing in a case that could influence the fates of Viacom and CBS has broken for lunch following hours of passionate arguments — but few hints from Judge George Phelan about how he might rule.
At issue is a motion by Redstone and his daughter, Shari, to dismiss a challenge that Viacom CEO Philippe Dauman and director George Abrams made to a May 20 decision ousting them from key positions in the family’s power structure.
Redstone replaced them on his seven-member family trust, which will vote his controlling stake in National Amusements when he can’t do so. The exhibition chain owns 80% of the voting shares in Viacom and CBS.
Dauman and Abrams say that Sumner, 93, is no longer competent to direct his own affairs, and is being manipulated by Shari. They want the court to have an independent doctor examine Viacom’s Chairman Emeritus.
Redstone’s lawyer, Robert Klieger, says that the case belongs in California, where his client lives. “He is the one whose liberties are sought to be taken away,” he says.
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He adds that “the lion’s share of the evidence and virtually every witness who would testify in this action would be from California.”
If Dauman and Abrams really cared about Redstone, Klieger says, then they’d seek a guardian for him — which would have to be done in California.
Instead, the lawyer says, the executives just want the Massachusetts court to save their jobs. “As long as we get back on the trust, we’re cool.”
Dauman and Abrams’ lawyer countered that the trust was created in Massachusetts, and the trust document makes multiple references to the state and its law.
“The question is where is the principal place of administration…This is a Massachusetts trust through and through.”
If this dispute goes to a California judge who earlier this year heard a case involving Redstone’s competence, “we don’t know whether we would challenge him or not.”
As for Redstone’s relationship with his daughter, “even though he’s a big media mogul, he loves his family,” Shari’s lawyer, Elizabeth Burnett, says.
Shari “has no interest in running Viacom. She’s a very busy person …She has one focus: for it to have strong, professional management.”
The lawyer added that Sumner’s “grandchildrens’ legacy has lost billions of dollars under Mr. Dauman.” Four of his five grandchildren support the motion to dismiss.
And while Sumner and Shari have locked horns, “families have fights. They go through periods when they don’t get along…That’s normal family life.”
When Sumner broke up last year with companion Manuela Herzer “the first person he contacted was Shari Redstone.”
But Dauman and Abrams’ lawyer countered that Sumner and Shari were “at each other’s throats for years…They were at war.”
She’s now taking advantage of his vulnerability to “isolate him” and seize control of Viacom and CBS, he says.
Redstone’s lawyer says that Dauman and Abrams’ challenge to his client’s competence fails because they haven’t fulfilled the requirements of the trust. It says he must be assumed competent until either three doctors or a court find him incompetent — and that decision can’t be retroactive.
Dauman and Abrams’ lawyer mocked the reasoning saying “Sumner can be insane…and no one can say a word. That’s what they’re saying.”
A lawyer for Sumner’s granddaughter Keryn, who supports Dauman and Abrams, said that he expects to have unsealed several depositions and evidence in this year’s California case about his competence.
Today’s proceedings were streamed by Courtroom View Network.
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