Just hours after Les Moonves declared a Game of Thrones level war today on Shari Redstone allegedly seeking to alter the CBS board to ensure a merger with Viacom, the two sides have speedily been given a date to face-off in court.
Lawyers for CBS Corporation and the Redstone run National Amusements will meet in front of Chancellor Andre Bouchard in Delaware’s Court of Chancery on May 16 at 2 PM to argue over the media corporation’s desire for a temporary restraining order.
“Plaintiffs are filing this complaint and accompanying motion for a temporary restraining order to prevent Ms. Redstone and NAI from attempting to replace the Board or modify the Company’s governance documents before any Board action taken at the Special Board Meeting becomes effective, said CBS in their breach of fiduciary duty complaint filed today against Sumner Redstone’s daughter and the company the once fearsome media mogul founded.
“Counsel for plaintiffs is instructed to serve a copy of this letter on the defendants, notifying them of the hearing immediately,” the Diamond State magistrate told CBS attorneys Monday in correspondence confirming the hasty hearing (read it here). In the expectation that National Amusements may have a thing or two to say about events and the quickly moving calendar, Chancellor Bouchard also gave all sides until 4 PM ET tomorrow to file paperwork.
Already claiming to be “outraged” by accusations of planning a deck stacking move, NAI responded on Monday saying nthe company, which welds control over nearly 79% of CBS’s voting stock, and Redstone have “no intention of replacing the CBS board or forcing a deal that was not supported by both companies.” Of course, the head of once long-term Viacom boss Philippe Dauman that the younger Redstone figuratively put on a pike when she firmly took control of National Amusement in 2016 may serve as a warning otherwise, in the opinion of some.
Then, as expressed today by NAI after the CBS filing, there is talk of “incidents of bullying and intimidation in relation to one CBS director, dating back to 2016.” While no names are named, the Redstone controlled group also asserted that NAI has made every effort to deal with this matter privately and confidentially.” Adding another plot twist to any showdown, NAI then went on to passive aggressively added, “unfortunately, CBS’s action today continues to enable and empower such conduct.”
Again, no names but insiders can read a veiled threat when they see one in black and white. Sources tells Deadline that the board member in question is Bank of America chair emeritus Charles Gifford, who is a plaintiff in the May 14 complaint.
However, there is a possibility that the Wednesday hearing could be a non-starter even as CBS and NAI clearly have very different ideas about what a re-melding with Viacom should take and who should sit on the Iron Throne. Ideas that differ specially when the former describes the latter’s “prospects as a standalone business” looking grim” as recently as January of this year and Redstone seems to angling to deny Moonves full CEO power of the merged media giant, at the very least. The TRO shindig would be a dead letter office if the parties come to deal in the next 38 hours outside the court to grant each other more time to prepare for the longer litigation to come, sources tell Deadline.
Regardless, with CBS’ upfront Carnegie Hall presentation set for the same day at 4 PM ET as the TRO hearing, the calendar and atmosphere is tight all round. Certainly, advertisers and Wall Street are not going to warm to uncertainty if Moonves and crew are denied the TRO.
If CBS’ motion is granted then there is a NAI kneecapping meeting of the company’s full board currently set for May 17 in NYC to “consider potential responses to Ms. Redstone’s conduct, including the issuance of a dividend of voting Class A shares to all stockholders — both Class A and Class B.,” according to today’s filings. That move by the Moonves run company is based on bylaws approved by now defendant Sumner Redstone and baked into when CBS become its own corporate entity with the 2005 split from Viacom. Aiming to reduce NAI’s voting power down to 17%, the goal would be to permit the House of Moonves to exist as “an independent, non-controlled company” and handle any future merger talks free of Redstone pressure, in theory.
To cram more into a packed week for CBS, May 18 sees the company holding its annual stockholder meeting on May 18 at the Museum of Modern Art in the Big Apple.
Which is another way of say, following the bouncing ball – cause it may move very fast.
Teams of attorneys from NYC firms Wachtell, Lipon, Rosen & Katz plus Weil, Gotshal & Manges LLP and Ross Aronstam & Moritz LLP are representing CBS Corp and the various plaintiffs in the matter. No word yet on who the lawyers for the Redstones, National Amusements and the other defendants are.
Deadline’s Dawn Chmielewski contributed to this report