Dauman, who has long maintained that he has a strong friendship with Redstone, quickly charged that his removal from the boards of the trust and National Amusements, which owns a almost 80% stake in Viacom and CBS (CBS), was the work of Redstone’s daughter Shari, Viacom’s vice chairman and a board member, who has been critical of the way the company has been managed in recent years.
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The two men said in a statement that Redstone’s daughter, National Amusements and Viacom director Shari Redstone is unduly influencing her father, who they claim they have been denied access to.
Sumner Redstone has actively petitioned the L.A. County Superior Court late this morning for an order confirming the validity of his removing trustees from his SMR National Amusements trust (which eventually controls a $40B media empire).
Dauman and Abrams are suing Redstone trust members, including Sumner Redstone himself and Shari Redstone, alleging that she is manipulating her father in his weakened condition to alter the trust that will one day decide the fates of Redstone’s two media companies.
Viacom, like other media companies, has suffered from falling ratings at its cable networks such as Nickelodeon and MTV as younger viewers migrate to online and mobile video. In addition, Ms. Redstone’s daughter Kimberlee Ostheimer is expected to be tabbed for National Amusements’s board of directors.
Redstone’s attorneys released a statement on Sunday saying Redstone opposed Dauman’s plan to sell a stake in Viacom’s movie studio, Paramount. Sumner Redstone is in need of 24-hour care and has difficulty communicating. Instead, Viacom criticized Mr. Redstone for not speaking while participating by phone in a board meeting that followed. The court filing states that Redstone is the sole beneficiary of the trust during his lifetime and has the right to make changes to the trustees unless he is “incapacitated”.
“Viacom implied Shari Redstone played a role in choosing Mr. Redstone’s legal counsel”, the statement reads.
“If these purported actions are not voided, Shari will have effectuated an unlawful corporate takeover and will be able to exercise control of Mr. Redstone’s companies, contrary to his longstanding wishes”, Dauman and Abrams said in the complaint. “Not a sound was heard from Sumner, who was connected by phone”, the statement said.
“The picture is quite clear, Mr. Redstone is being manipulated and used by his daughter in an attempt to accomplish her long-held goal, which Mr. Redstone has always opposed, of gaining control of National Amusements and Viacom”, a Viacom spokesman said in a statement provided to AFP today.
Dauman succeeded Redstone as chairman of Viacom in February – but Shari Redstone voted against him. “Abrams and Dauman, both Viacom directors, and received no response from them”.
Redstone won a judgment last month, declaring he had the mental capacity to change his healthcare agent and setting in motion the return of Shari Redstone to a controlling capacity.
“If the current management team is replaced, Viacom’s stock will undoubtedly rise on a short-term basis given investor frustration (over) the company’s operating performance and general absence of fondness among much of Wall Street towards the company and its management”, Wieser wrote.
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During the court proceedings, Dauman was on Redstone’s side, testifying that Redstone was “engaged” and “attentive” despite his difficulty communicating. “Sumner Redstone makes his own decision”, she said. “They are a shameful effort by Shari Redstone to seize control by unlawfully using her ailing father Sumner Redstone’s name and signature”. His representative said that Redstone is in good spirits, entertaining guests and looking forward to celebrating his 93rd birthday this week.
