Viacom CEO Philippe Dauman and director George Abrams say this morning that “there is grave risk that Sumner Redstone will not be available” if a Massachusetts judge doesn’t grant an expedited information gathering process for their case to prove his incompetence.
“He is a 93 year old man suffering from overwhelming physical ailments, including an inability to speak, stand, walk, eat, write or read,” the plaintiffs say in a court filing ahead of a hearing tomorrow. “He suffers from a progressive neurological disease characterized by dementia. Mr. Redstone has been reportedly hospitalized within the last few weeks.”
The duo specifically want an “immediate medical evaluation” of Viacom’s controlling shareholder.
Dauman and Abrams want to overturn Redstone’s May 20 decision to fire them from his family trust, which will control his 80% stake in National Amusements when he’s deemed incompetent to handle his own affairs. The theater chain owns 80% of the voting shares at Viacom and CBS.
The Viacom execs say that Redstone is already incompetent, and being manipulated by his daughter Shari. She’s President of National Amusements and Vice Chair of Viacom and CBS. She opposed Dauman’s recent appointment as Viacom’s Chairman.
“The uncertainties generated by Shari Redstone’s actions with respect to her father have caused uncertainty and potential injury to the company and it’s efforts” to sell a minority stake in Paramount. Sumner Redstone has opposed the plan.
A brief from Redstone’s camp on Friday said that there was no need for an expedited proceeding since it merely involved Dauman and Abrams’ “acutely self-interested” effort “to secure their tenuous positions with Viacom.”
The Redstone filing noted that a geriatric psychiatrist evaluated him and found him legally competent on the day he kicked the execs off his trust. It also said that four of the seven members of Redstone’s trust voted to ratify his decision to oust Dauman and Abrams.
Viacom shares have lost about a third of their value over the last 12 months, and nearly half of their value over the last two years.
Today’s brief walks back Dauman’s assertion in a November affidavit in a different case that he had recently found Redstone to be “engaged” and “attentive.”
Those characteristics “would be attributed to a person who lacks the relevant capacity” to make big corporate decisions.
In December, Dauman reassured an investor gathering that he talked to Redstone “several times a week,” and found he had “an incredible will to live and enjoyment of life with some physical disabilities which some of us have.” He urged those discussing his case to “maintain a sense of decency.”
The latest brief notes that “six months is an eternity for a very sick man in his nineties.”
It also challenges the trustee vote ratifying Redstone’s effort to oust Dauman and Abrams. The decision by a majority of the group seems to indicate that Dauman’s tenure at Viacom likely will be short lived even if he succeeds in having Redstone taken out of the picture.
“No Court would honor such a ‘Ratification’ at this point in a proceeding — or at all,” Dauman and Abrams’ brief says.