Sumner Redstone’s mental competency is key in the Viacom board dispute, judge says

Sumner Redstone’s mental capacity will play a key role in the dispute over the media mogul’s move to oust five Viacom board members, a Delaware judge said Wednesday.

But the judge stopped short of fast-tracking the case, saying the board members, including Chief Executive Philippe Dauman, will stay in place for now.

In a sweeping move last week, Redstone and his daughter Shari said they were replacing the five members, in a major step toward solidifying their control over the struggling media giant. Analysts say that if the moves survive legal challenges, they could lead to the replacement of Dauman as CEO of the company.

Attorneys for Redstone’s National Amusements – the entity that controls 80% of Viacom’s voting shares – asked the Delaware court to affirm the changes. Viacom, however, challenged the Redstone family’s authority to make unilateral changes to its board.

The judge clearly expressed that he wants to know the mental capacity of Redstone before making a final decision on the validity of the 93-year-old media titan’s actions. However, he decided to hold off on approving a discovery process to look into the issue. He said he did not want to duplicate proceedings in Massachusetts, which also are expected to hinge on Redstone’s mental state.

In that case, Dauman and fellow Viacom board member George Abrams filed suit in Massachusetts state court in May to dispute their removal from the National Amusements trust, which will eventually determine the future of the $40-billion media empire that includes CBS Corp. A Massachusetts hearing is set for June 30.

“If discovery proceeds there, I want to know about it,” said Delaware Chancery Court Judge Andre Bouchard, according to a transcript. “If discovery is shut down there, I want to know about it. I want to be kept abreast of what’s going on in the other litigations that bear on the status of competency issues in play.”

The Delaware judge said the next hearing in the case would be scheduled for July, when he will hear arguments about the validity of the moves by Redstone.

If the attempted shakeup is upheld, the new board members would include Buzzfeed Chairman Kenneth Lerer and former Sony Entertainment Inc. President Nicole Seligman.

ryan.faughdner@latimes.com

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