Redstone family feud airs in court
As if a tough earnings report for Viacom Inc. and the looming debt issues of National Amusements Inc. weren’t enough of a headache for Sumner Redstone this week, he’s also dealing with the latest legal fight involving his fractious family.
Today marks the third and final day of testimony in a lawsuit by the Viacom and CBS Corp. chairman’s nephew Michael Redstone against his father, Edward, and uncle Sumner. The suit says Michael is owed at least several million dollars based on a trust with shares in the Redstone family-owned theater chain National Amusements left to him by Sumner’s father, Mickey.
Michael and the shares’ trustees originally filed their case in 2006, alleging that he was not compensated fairly for selling his stake in National Amusements, which also serves as Sumner Redstone’s holding company for his controlling interests in Viacom and CBS Corp., back to the company in 1984 for $15 million.
Although it is struggling with $1.46 billion in debt, National Amusements is still a large and valuable company, especially compared with 25 years ago.
A Massachusetts Superior Court dismissed the suit in 2007 on the grounds that the statute of limitations had expired. In an appeal late last year, the state’s Supreme Judicial Court upheld most of the decision, but remanded one part back to the lower court: Michael’s statement that there was an oral trust created by Mickey Redstone to give him additional shares, which he never received.
In testimony Monday, a visibly annoyed Sumner Redstone strongly disputed his nephew’s claim. “There was no oral trust,” he said, according to a recording made by the Courtroom View Network. “There never has been an oral trust.”
The suit is just one of many battles in the Redstone family over money and control of its media assets.
Sumner Redstone has also feuded, in court and behind the scenes, with his children Shari and Brent.
Edward Redstone, Michael’s father and Sumner’s younger brother, testified Tuesday. Attorney James DeGiacomo, who has worked for the family and previously served as a trustee for Michael, will testify today.
If the judge rules in Michael Redstone’s favor, there will be a subsequent trial to determine what he is owed.