Sumner Redstone told the Massachusetts Family and Probate Court today, ahead of a hearing tomorrow, that he can be left alone while it rules on Viacom CEO Philippe Dauman’s effort to remain on Redstone’s family trust and the board of his National Amusements theater chain.
At issue is a May 20 notice from Redstone telling Dauman and Viacom director George Abrams that they had been replaced on the two entities. The trust would control Redstone’s ownership stake in National Amusements if he can’t manage his own affairs. NAI, in turn, controls 80% of the voting shares of Viacom and CBS.
Dauman and Abrams say Redstone, 93, is incompetent and his daughter, Shari, is manipulating him to control his media empire. They want him examined by an independent doctor.
But in a filing today, Redstone says that there’s no need: A majority of the trustees and the NAI board — whose competence isn’t in question — also voted to oust Dauman and Abrams.
“Consequently, there is no justification for an intrusion upon Sumner’s privacy at all, much less before these likely case dispositive issues have been resolved,” the filing says.
It adds that he was already examined by geriatric psychiatrist Stephen Read in September, October, December, January, April and May and he “does not suggest that a further mental examination of Sumner is necessary, or even would be helpful.”
The filings (read here and here) reiterate Redstone’s assertion that Dauman and Abrams haven’t fulfilled the conditions that the trust spells out to have him declared incompetent: It requires either a finding by three physicians, or a court — and their decision can’t be retroactive.
Until he’s deemed incompetent, “his decisions are final, conclusive, and immune from attack.”
If they could invalidate actions taken before a finding of incompetence, then “no one is entitled to vote the NAI stock,” today’s court filing says. “NAI would be paralyzed, and Viacom’s board and management — including, not coincidentally, Plaintiffs — would be accountable to no one. Such an absurd result plainly was not intended.”
Meanwhile, Viacom added some suds to the Redstone family soap opera by releasing previously private letters that highlight the once-bitter divisions between Sumner and Shari.
For example, Sumner wrote in a September 29, 2014 letter to members of his National Amusements trust: “Recent dealings with my daughter, Shari, have caused me to believe even more strongly that she does not have the requisite business judgment and abilities to serve as Chair of Viacom or CBS.”
He urged trustees to let each company’s board “exercise their independent judgment regarding the appointment of a Chair.”
A June 25, 2009 letter from Sumner to Shari noted that, when he dies, his trust would use its clout to have her named Non-Executive Chairman of Viacom and CBS.
But it adds that “Philippe will continue to be CEO of Viacom” and she would “deal with management only through the CEO, and not directly.”
A compensation agreement “will also provide among other things for the continuation of your salary of $5.5 million with cost of living increases for the ten year term you requested, with the continue use of The Pierre and the airplane, as well as changing the [Supplemental Executive Retirement Plan] age from age 60 to age 55.”
Sumner closed the letter saying he’s “glad this will be behind us. Love, Dad.”
With the releases, Viacom seemed to thumb its nose at a letter that Redstone-controlled National Amusements released yesterday.
It said that the theater chain is “deeply concerned with the time and resources being devoted to malicious and ultimately pointless attacks on Sumner and his family, rather than to business and management decisions that will redound to the benefit of all shareholders.”
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