Viacom and its CEO Philippe Dauman asked two courts today to order an immediate exam of controlling shareholder Sumner Redstone to determine whether the 93-year-old is competent to run his media empire.
“The necessity of an immediate mental examination cannot be overstated,” Dauman’s lawyers told the Massachusetts Probate and Family Court.
Viacom Lead Independent Director made a similar appeal to Delaware’s Chancery Court.
In the Massachusetts case, Dauman and Viacom director George Abrams have asked the court to overturn Redstone’s May 20 notice replacing them on his family’s trust and the board of National Amusements.
They say that Redstone’s being manipulated by his daughter, Shari — Viacom’s Vice Chair. She denies the charge.
Redstone’s moves were important: The seven-member trust will control his holdings in the theater chain when he can’t manage his own affairs. National Amusements controls 80% of the voting shares of Viacom and CBS.
Without an immediate examination, “the evidence of Mr. Redstone’s capacity as of May 20, 2016 will be lost,” the Massachusetts filing says. Meanwhile, “momentous events relating to the control of [Redstone’s media] empire…are unfolding at a quick pace, and are in danger of becoming irreversible.”
That might refer to a deal Dauman has been trying to arrange to sell 49% of Paramount. Redstone opposes the sale. National Amusements wants to change Viacom’s bylaws to require that the board unanimously approve any transaction, giving the Redstones the ability to block.
In the Delaware case, Viacom objects to National Amusement’s effort to replace five directors including Dauman. The judge in that case said yesterday that he wants to see what happens in Massachusetts before ordering Sumner Redstone to submit to an examination.
“I’m not going to wade into that terrain right now because it is pending elsewhere, and
I’m not going to duplicate that,” Judge Andre Bouchard said. “There are questions of human dignity to a very elderly person. That’s treacherous ground to dive into too quickly.”
Viacom says it “requires a medical examination to confirm that Mr. Redstone’s mental condition, like his physical condition, has severely diminished, such that he did not have the capacity to take the actions being challenged in this litigation.”
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