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Sumner Redstone tries to block Philippe Dauman’s efforts to return to trust

Once close allies, Viacom CEO Philippe Dauman, left, and Viacom controlling shareholder Sumner Redstone are now squaring off in court over who should serve on Redstone's trust. Above, the two men in 2007.
(Mel Melcon / Los Angeles Times)
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Sumner Redstone is asking a court to derail Viacom Chief Executive Philippe Dauman’s efforts to quickly reclaim a seat on a trust that eventually will oversee the mogul’s $40-billion media empire.

Redstone’s court filing, in Massachusetts probate court, said that Dauman and Viacom board member George Abrams have no standing in the dispute over who should serve as trustees to the Sumner Murray Redstone National Amusement Inc. Trust because they are not Redstone’s beneficiaries.

The trust eventually will oversee the ailing 93-year-old mogul’s controlling interest in Viacom and CBS Corp.

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“Plaintiffs filed this action as part of an acutely self-interested legal strategy that they began plotting months earlier to secure their tenuous positions with Viacom Inc.,” according to the motion filed Friday by Bruce Singal, a Boston attorney who represents Redstone.

The legal volley comes two weeks after Redstone abruptly dumped Dauman and Abrams as trustees.

Redstone also removed the two men from the board of National Amusements Inc., the Redstone family investment vehicle that holds the controlling stakes of CBS and Viacom.

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The two men contend that the mogul’s daughter, Shari Redstone, is behind their ouster from the trust.

The court filing contains excerpts of a report from a UCLA geriatric psychiatrist who has examined the ailing media mogul twice during the last two weeks. Dr. James Spar found that Redstone was mentally competent to make decisions regarding the trust.

Redstone, during his visits last month with the doctor, had harsh words for his protege, Dauman, saying he had done “a bad job running Viacom.” Viacom’s stock has fallen nearly 40% in the last year amid low ratings at its cable channels, MTV and Comedy Central and a disappointing performance from Paramount Pictures.

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Friday’s court filing asks the Massachusetts judge, who has scheduled a hearing for Tuesday, to deny Dauman and Abram’s motion for an expedited trial.

Redstone’s attorneys also want the case moved back to California, where Redstone lives. They would like Los Angeles County Superior Court Judge David J. Cowan to oversee the latest matter after he ruled favorably in a separate Redstone legal dispute.

Cowan dismissed a lawsuit filed by Redstone’s former companion, Manuela Herzer, which challenged the mogul’s mental competency last month.

An attorney for Dauman and Abrams late Friday responded to the 19-page motion filed by Redstone’s legal counsel.

“There are many undisclosed facts that will emerge concerning the conduct of Shari and her representatives,” said attorney Les Fagen of the law firm Paul Weiss Rifkind Wharton and Garrison.

“Even their own papers filed [Friday] reveal that the trustees as stated in the affidavits have not seen Sumner for as long as ‘many years’,” Fagen said.

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“We look forward to a full hearing on Tuesday when we will seek expedited discovery and an independent review of the facts in order to resolve this matter as quickly as possible,” he said.

In their lawsuit filed last week, Dauman and Abrams said Redstone “is in the grip of a neurological disorder and other serious ailments,” which could include dementia. They allege that he has become dependent on his once-estranged daughter for his care.

Shari Redstone, who is vice chair of Viacom and CBS, also will be one of the seven trustees, along with her son Tyler Korff.

Friday’s court documents paint a picture of longtime Redstone advisers huddling among themselves earlier this year over concerns that Redstone, with his daughter more firmly in charge of his affairs, might take steps to diminish their influential positions on the trust and the board of National Amusements Inc.

“By the beginning of 2016, Dauman was growing increasingly concerned that he might be terminated as Viacom’s CEO. He had good reason to be concerned,” Singal wrote. “Viacom’s stock had plunged nearly 50% over the previous year, wiping out more than $15 billion of value. … And Dauman was readying to put Paramount, which Sumner still regarded as a crown jewel in Viacom’s portfolio, on the market to solve short-term cash needs.”

The proposed Paramount sale infuriated Redstone.

“Although Sumner had long supported Dauman, his longtime friend and business colleague, against calls for his ouster, Dauman recognized that friendship would carry him only so far,” Singal said.

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“Sumner had removed prior CEOs for far less, and even under the best circumstances, Sumner — then 92 years old — could not protect Dauman forever,” he said.

The action was taken to assure accountability, the legal team said.

“If Dauman controlled the trust, however, he would effectively be chairperson, CEO and controlling shareholder of Viacom and would be accountable to no one,” Singal said.

Redstone’s longtime estate attorney, Boston lawyer David Andelman, initially met with Dauman and Abrams to plot a strategy, the motion said. Andelman, however, concluded that Redstone wanted to make the changes and supported the mogul.

In addition, the filing said a majority of trustees also voted in support of Redstone’s decision to remove Abrams, a friend of Redstone’s for 50 years, and Dauman.

meg.james@latimes.com

@MegJamesLAT

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UPDATES:

3:44 p.m.: This article was updated with a comment from an attorney for Philippe Dauman and George Abrams.

This article was first published at 2:58 p.m.

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