The Massachusetts probate judge who may decide the fate of Sumner Redstone’s $40 billion media empire is thinking seriously about several concerns that Viacom CEO Philippe Dauman has raised — including what it means for someone to have “undue influence,” and whether his court is the right venue to hear the case.
Judge George Phelan showed what’s on his mind in an order, disclosed today, that asks lawyers representing Dauman, Vice Chair Shari Redstone, and others to provide their opinions about several key questions in the case ahead of a June 30 hearing on a motion to dismiss.
Dauman and Viacom director George Abrams want the judge to find that Redstone, 93, is incompetent and being manipulated by his daughter, Shari. That might determine whether Redstone could remove Dauman and Abrams from his family trust and the board of National Amusements — which owns 80% of the voting shares of Viacom and CBS.
The Redstone team says he’s still competent, and that any ruling on his decision-making ability should go to a court in California, where he lives. They also say that votes by the trust and theater chain boards ratifying the decisions to oust Dauman and Abrams make any ruling about Redstone superfluous.
The judge says he asked his questions “in the interest of expedient and efficient management of this case.” But he doesn’t rule out considering other “arguments about or bases for or against dismissal of the action.”
Here’s what Phelan wants to know:
The Court’s issues/questions are as follows:
1) Does a Court have to find Sumner mentally incapacitated as a predicate to a finding of undue influence by Shari?
2) Do the terms of the Trust permit or prohibit removal of the plaintiffs as trustees by way of influence by Shari, or is the Trust silent on the issue? If the Trust is silent on the issue, and if undue influence were exerted, is trustee removal prohibited by law or public policy in Massachusetts?
3) At article E page 25, the Trust instrument uses the terms “mentally incapacitated” and if “adjudged incompetent by a court of proper jurisdiction.” Should Massachusetts or California law apply as to the meaning of “mentally incapacitated”?
4) Even if the issue of Sumner’s mental incapacity is a California issue, do the terms of the Trust or the [Massachusetts Uniform Trust Code] require that the issue of influence, undue or not, in procuring the removal of the plaintiffs as trustees be decided in Massachusetts?
5) If California has exclusive jurisdiction or represents a better venue over the issue of mental incapacity and if a California court of proper jurisdiction deems Sumner to be mentally incapacitated, is California’s definition of incapacity substantially similar to Massachusetts’ definition to afford the California determination full faith and credit on that issue?
6) Does California have exclusive or concurrent subject matter jurisdiction over the administration of the Trust?
7) If Massachusetts has subject matter jurisdiction of the Trust by its terms, should California venue supersede that jurisdiction given the purported facts of Sumner’s age and physical limitations?
8) Given that the Trust was created by Sumner as a Massachusetts Trust when he was indisputably not mentally incapacitated, should MUTC sec. 201 govern disputes regarding the removal of trustees?
9) Did Sumner, if he acted independently, competently, and free of undue influence in removing the plaintiffs as trustees, subject the issue of removal to Massachusetts jurisdiction pursuant to MUTC sec. 202?
10) Do any of the parties rely on MUTC sec. 412 to prevent or leave undisturbed the removal of the plaintiffs as trustees?
11) If Sumner were not mentally incapacitated and had not been unduly influenced to do so by Shari, do the terms of the Trust authorize him to have removed the trustees for no reason?