Shareholder suit targets Viacom, CBS payments to Redstone
Viacom, CBS and its respective board members were sued on Tuesday in Delaware Chancery Court for decisions related to their 92-year-old executive chairman and controlling stockholder Sumner Redstone.
Viacom, CBS and their board members have been sued for apparently placing loyalty to Viacom chairman Sumner Redstone above their duty to shareholders.
According to Viacom, the DE lawsuit stands without merit and it said in a statement that the company aims strongly to fight it. The company also replied to the activist report and said that it was completely focused on the long-term value for its shareholders.
The suit – a derivative suit, against the boards of both companies – alleges that millions of dollars in payments to Redstone amount to “services not rendered” and bad faith by the boards of Viacom and CBS, and that Viacom’s board misrepresented Redstone’s health in its January 2015 proxy.
Viacom has maintained Redstone is in full mental control.
The embattled media giant that owns MTV, Comedy Central and other popular brands, got hit with a double whammy on Tuesday – a shareholder lawsuit accusing the board of failing its fiduciary duties and a highly critical activist investor presentation. His paper came as investors are being asked to consider whether Viacom should allow all shareholders to vote. In that suit, Herzer is seeking to have Redstone examined to see if he was mentally able to make decisions for himself.
The Redstone controversy began last fall when his former girlfriend, Manuela Herzer, was thrown off his advance healthcare directive and escorted out of his sprawling hilltop estate.
Jackson called on the 92-year-old Redstone, Chief Executive Philippe Dauman and Chief Operating Officer Tom Dooley to be replaced.
Ms. Herzer’s attorneys have pressed for Mr. Dauman to be deposed, but the California judge overseeing the case declined this month to order the deposition, suggesting it wasn’t clear that the California court had jurisdiction over the New York-based Mr. Dauman.