Lawsuit Hints at Family Dispute
An ugly feud has erupted in one of the media’s reigning dynasties, with the son of mogul Sumner Redstone filing a lawsuit that seeks to dissolve his father’s $8-billion company and cash out his own one-sixth stake.
In a lawsuit filed last week in a Maryland Circuit Court, Brent Redstone accused his father and sister, Shari Redstone, of “self dealing” and “misappropriating millions of dollars” from National Amusements Inc.
The Dedham, Mass.-based company, which operates a leading chain of movie theaters, functions as an investment vehicle for Sumner Redstone, the family’s 82-year-old patriarch. He controls National Amusements, which owns 71% of the voting shares of CBS Corp. and Viacom Inc., two publicly traded entities that were created in last month’s breakup of Viacom Inc.
Shari Redstone, 51, is president of National Amusements and recently was named vice chairwoman of CBS and Viacom. Her father serves as chairman of both companies.
None of the Redstones would comment on the lawsuit. But people close to Sumner Redstone said he was saddened and embarrassed by the public airing of family affairs.
In a statement Monday, National Amusements called the allegations “meritless” and “completely unfounded.”
“It is unfortunate that Brent Redstone is abusing the court system in an attempt to extract a financial settlement in a family dispute,” the statement said.
Brent, 55, is on National Amusements’ board of directors but has few remaining ties to the family business in which he once played an active role.
Early in his career, Brent was an assistant district attorney for 14 years in Boston. He practiced law in Colorado for two years before joining Viacom’s Showtime cable network as an executive. Sources said, however, that he chose to leave the company to return to Denver, where he had purchased a large ranch.
Relations between Sumner Redstone and his son have long been strained, sources close to the family said, but became distant after Redstone’s first wife, Phyllis, filed for divorce in 1999, ending their 52-year marriage. Brent sided with Phyllis, and Shari supported their father, who has since remarried.
The suit alleges that during the divorce proceedings, Sumner Redstone tried to force his two children to turn over their voting shares in National Amusements to him in order to solidify his control of the company.
Brent had refused, according to the suit.
Brent and Shari served on the board of Viacom Inc. from 1991 to 2003. But his lawsuit alleges that he was forced off the board because he failed to be a rubber stamp for his father.
“Each board member enjoys considerable income, power and prestige that is contingent upon continuing to please Sumner Redstone,” the lawsuit alleges.
Rumors that Brent would take some sort of legal action against his father have circulated in Hollywood for years.
Sources close to the Redstones said it was unclear what prompted the son to lash out at his father at this particular time.
The suit, however, brings into the open a bitter sibling rivalry that until now has festered quietly. “I’m sure it irritates him to no end that Shari has the title and the power,” said one person close to the Redstones. Shari was publicly anointed as Redstone’s heir apparent last summer.
Although Shari and Sumner Redstone are considered shrewd, hard-nosed mavericks, Brent is described by people who have worked closely with him as laid back, quiet and mild-mannered.
“He’s not a malicious person,” said one former Viacom executive who worked with Brent. “What you see is what you get.”
The lawsuit claims that Sumner Redstone promised that one day his two heirs would run the family-owned company together. Brent, it alleges, “has been denied for many years any meaningful role managing, directing or participating in the corporate affairs of National Amusements,” even as Shari’s stature rose.
The lawsuit also makes some potentially damaging allegations about Sumner Redstone’s business practices.
Among its claims: Redstone failed to hold National Amusements board meetings; Redstone tried to force his son to approve minutes of meetings that never took place regarding bank loan applications for millions of dollars; Redstone failed to inform his son in a timely fashion of major transactions affecting National Amusements assets, including the company’s “bailout” of a personal debt of $425 million owed by Redstone.
The suit also alleges that Sumner Redstone put his own interests before National Amusements’ in several stock purchases involving Viacom shares as well as those of Midway Games Inc., a video game company he controls.