Viacom Inc. and CBS Corp. board members are being sued by an investor who contends the boards of the two media companies are protecting the interests of mogul Sumner Redstone at the expense of corporate shareholders.
The lawsuit was filed Tuesday in Delaware court by E.F. Greenberg, who has owned CBS and Viacom shares since 2010.
The action names as defendants Redstone, Viacom Chief Executive Philippe Dauman, CBS Chief Executive Leslie Moonves and Shari Redstone, the media mogul’s daughter who serves as vice chair of the two media companies.
Redstone, 92, is the executive chairman of both Viacom and CBS, which he controls with nearly 80% of the voting shares of the two separate companies.
The billionaire is in failing health, struggles to speak intelligibly and is largely confined to his Beverly Park mansion in Los Angeles. He has not participated in public corporate events for more than 18 months.
Greenberg, in the shareholder derivative suit, claims the boards of the two companies are not fulfilling their duties as stewards of all shareholders.
The suit alleges that board members have concealed Redstone’s deteriorating condition and that they have not come up with a succession plan.
The suit questions the executive compensation of Redstone — estimated to be more than $169 million between 2012 and 2014 — even though Redstone has become “physically and mentally incapacitated,” according to the lawsuit.
Redstone’s private physician in Los Angeles has testified that, despite Redstone’s difficulties speaking, he is mentally competent.
“This lawsuit is without merit,” Viacom spokesman Carl Folta said.
Redstone’s former girlfriend, Manuela Herzer, last November filed suit, challenging Redstone’s advance healthcare directive. She has claimed that Redstone no longer is mentally competent.
Redstone has asked for the probate case to be dismissed. Attorney Pierce O’Donnell is handling that action.
The shareholder lawsuit is being handled by Delaware attorney Timothy Dillon of the McCann & Wall law firm as well as the Greenfield & Goodman firm of New York.