Massachusetts Court To Take Redstone Case, But Doesn’t Order A Mental Exam

Viacom CEO Philippe Dauman appears to have won a partial victory in his effort to remain a central player in Sumner Redstone’s media empire.

Massachusetts Probate and Family Court Judge George Phelan has decided to take a case by Dauman and Viacom director George Abrams challenging Redstone’s ability to restructure his family trust and the board of his National Amusements, which owns 80% of the votes at Viacom and CBS.

But the court did not agree with Dauman’s request to order an immediate examination of the 93-year-old in an effort to determine whether he was competent on May 20 when he ousted the Viacom execs from his seven member family trust and National Amusements board.

Dauman and Abrams say he wasn’t competent. In addition, they say that Redstone is being manipulated by his daughter, Shari, who’s Viacom’s Vice Chair.

The Redstones asked the court to dismiss the charges, saying that they’re unfounded. In addition, they say, any review of Sumner Redstone’s capacity should take place in California, where he lives — and at a court that, in a different case this year, declined to challenge his competence.

In a 76-page ruling, the Massachusetts judge rejected the request to dismiss. The “interests of the parties and the interests of justice” lead him to conclude that the case “must be decided not only by Massachusetts law as the trust insists but by a Massachusetts court.”

He adds that it’s “plausible” that Redstone’s effort to remove Dauman and Abrams “is not logical and not natural, given the subjective context of the Redstone family dynamic” which included many bitter disputes between father and daughter.

Phelan says there is “no need to conduct a current mental and physical examination of Sumner.” But he allowed Dauman and Abrams’ lawyers to see his medical records going back to the beginning of 2015.

The judge says he can schedule “a speedy trial, not just a hearing, on the merits” of the case in October. The California court that the Redstones have asked to support his decisions has scheduled a hearing on October 18.

“This Court does not know the purpose of that hearing, whether preliminary in nature of not,” Phelan says.

The judge warns the parties not to conclude that his ruling is a “harbinger of thoughts, inclinations, tendencies, or decisions to come.”

Redstone spokesman Mike Lawrence says that in the motion to dismiss “the court was required by law to assume all of Mr. Dauman and Mr. Abrams’ allegations as true, including those which we will prove false as this case progresses. We look forward to exposing this specious and malicious attack on the Redstones.”

He also thanked the court “for protecting Sumner Redstone’s privacy and dignity.”

Even if Redstone’s ultimately found to be incapable of making his own decisions, votes by members of the trust and the National Amusements board to replace Dauman and Ambrams mean that “their dismissals will stand regardless of what Mr. Dauman and Mr. Abrams’s paid experts might say about Sumner’s capacity or alleged undue influence.”

A spokesman for Dauman and Abrams says today’s ruling “removes yet another of defendants’ efforts to block” an investigation and examination of Redstone’s competence. “We also appreciate that he is allowing prompt access to medical records and immediate discovery. We welcome the opportunity to prove the facts at trial.”

Phelan made his ruling the day before Delaware’s Chancery Court will hold a hearing on a related case from Viacom challenging National Amusements’ effort to replace five of the entertainment company’s directors — including Dauman.

Here, too, Viacom says the decision is invalid because Redstone is not competent. The judge in Delaware said that he would wait to see whether the Massachusetts court would order an exam before deciding whether he would require one.