Sumner Redstone defeats nephew in court
Sumner Redstone has prevailed in his latest family legal squabble, this time with nephew Michael Redstone over a disputed trust in a case that could have cost the media mogul hundreds of millions of dollars.
At issue was Michael Redstone’s contention that he’d been unfairly deprived of shares in National Amusements Inc., the holding company through which Sumner Redstone owns controlling stakes in CBS Corp. and Viacom Inc. Michael claimed that his late grandfather, Mickey Redstone -- Sumner’s father and National Amusements’ founder -- had created an oral trust to give him additional shares in the company.
Massachusetts Superior Court Justice Margaret R. Hinkle ruled against Michael Redstone. In a decision issued last week, Hinkle wrote that the plaintiffs had not proved that Mickey Redstone created trusts in 1959 for the benefit of Michael and his now-deceased sister Ruth Ann.
The case was argued in a four-day trial in July, during which Sumner Redstone, his brother Edward and a former family attorney testified.
Michael Redstone and his trustees first filed a suit in 2006, alleging that he had been undercompensated for selling his shares in privately held National Amusements back to the company in 1984 for $15 million. That case was dismissed in 2007 because the statute of limitations had expired.
But on appeal the state’s Supreme Judicial Court remanded one part of the decision back to a lower court: Michael’s claim that there was an oral trust created by Mickey Redstone to give him additional shares that he never received.
If Michael Redstone had won, National Amusements could have been forced to pay him a sum ranging from several million dollars to several hundred million dollars, depending on whether the judge ruled that he was owed his shares’ value as of 1984 or what they would be worth today, according to people close to the case.
The case was the latest of many feuds in Sumner Redstone’s fractious family over control and management of National Amusements.
A company spokeswoman and an attorney for Michael Redstone did not respond to requests for comment.
