Shari Redstone had better have thick skin as she prepares for Viacom’s court case to keep its board intact. It’s likely to be a messy and embarrassing affair, with her cast as the villain, based on company filings today at Delaware’s Chancery Court. (Read them here and here.)
Viacom wants to dig deeply into Sumner Redstone’s communications with his daughter — who’s President of National Amusements and Vice Chair of Viacom and CBS — as well as the 93-year-old’s decision-making ability, as part of its effort to go to trial within 100 days.
Redstone-controlled National Amusements, which owns 80% of Viacom’s voting shares, said today that it wants to replace five of Viacom’s directors, including CEO Philippe Dauman.
Sumner Redstone Moves To Replace Five Viacom Directors Including CEO Dauman
Viacom asked the court to keep the current board in place while it prepares for an expedited trial.
The main argument is that the communication from Redstone’s lawyers on May 20 ousting Dauman and director George Abrams from two key positions in the mogul’s empire “set in motion a chain of events that led directly to the flawed authorization by NAI’s ‘board’ to remove George Abrams, Philippe Dauman, Blythe McGarvie, Frederic Salerno and William Schwartz as directors on the Viacom Board.”
The filing adds that this was “orchestrated” by Redstone’s daughter, Shari which makes the removal effort “invalid.”
Another Viacom court document colorfully says:
Now, when Mr. Redstone’s physical and mental conditions have dramatically declined and he is unable to fend for himself, Shari has moved into his home, taken over his life, isolated him from contact with others, and purports to speak for him. In other words, unsatisfied with assets now worth more than $1 billion derived from gifts her father made to her over the years, Shari now seeks to become Mr. Redstone’s puppet master, pulling his strings behind the scenes to improperly seize control of Viacom. In doing so, Shari is attempting to use her father’s control to dismantle his own estate plan to serve her personal interests.
It adds that her “improper actions are creating significant uncertainty, impairing commercial and customer relationships and causing employee unrest. Among other things, she is intent on interfering with Viacom’s efforts to explore a possible, very valuable transaction that could generate a minority investment in Paramount Pictures, together with commercial and strategic benefits.”
Lead Independent Director Frederic Salerno says that in a recent phone conversation, Shari “indicated that if Mr. Salerno supported her efforts, she would not undertake to remove him. Mr. Salerno promptly informed Viacom’s Governance and Nominating Committee about Shari’s threat. Shari had the same conversation with and made the same proposal to another Viacom director. ”
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