Viacom CEO Seeks to Block Subpoena in Redstone Health Suit

  • Philippe Dauman says he has no unique knowledge of condition
  • Former girlfriend says Sumner Redstone is mentally incompetent

Viacom Inc. Chief Executive Officer Philippe Dauman sought to avoid testifying about the competency of the company’s chairman, Sumner Redstone, saying he has no unique knowledge of the 92-year-old mogul’s condition as investors increasingly call for his removal. 

Dauman asked a New York state court to block a subpoena issued by Manuela Herzer, Redstone’s former girlfriend and caretaker, who sued the billionaire in November. She says Redstone was mentally incompetent when he kicked her out of his Beverly Hills, California, home in October and put the Viacom CEO in charge of his health care if he could no longer make decisions on his own.

Dauman said in a filing Friday that he has “no medical expertise or unique knowledge” of Redstone’s decision and that Herzer’s subpoena is an attempt to harass the mogul and violate his privacy by distributing confidential medical information.

The case has turned a public spotlight on the health of the man who controls CBS Corp. and Viacom and serves as chairman of both, and has led at least one major investor to demand details about his condition while other shareholders have called for him to resign or be removed.

‘Mentally Capable’

The New York-based company said last month that Redstone was “mentally capable” in response to calls for more information about his health by Mario Gabelli, the largest outside holder of voting stock in Viacom, the parent of the Nickelodeon and MTV cable networks.

“The subpoena served on Mr. Dauman is utterly unjustified under the law,” Les Fagan, one the executive’s lawyers, said in an e-mailed statement. “The court has not ordered a deposition of Mr. Dauman, he is not a medical professional and his testimony is legally irrelevant to the issues in the California case.”

On Tuesday, another investor sued Viacom and CBS in Delaware Chancery Court, demanding the companies’ boards acknowledge the “mental and physical incapacity of Mr. Redstone to perform his job for either company” and implement succession plans.

The investor, E.F. Greenberg, accused CBS and Viacom directors of wasting millions by paying Redstone while he’s disabled by health problems. Directors knew Redstone’s declining condition left him physically and mentally incapacitated, yet still paid him more than $169 million in salary and bonuses during a three-year period starting in 2012, according to the suit.

‘Without Merit’

“The lawsuit is without merit” and Viacom will fight it, TJ Ducklo, a company spokesman, said in an e-mailed statement referring to the Greenberg suit. Dana McClintock, a CBS spokesman, declined Tuesday to comment on the suit over Redstone’s pay.

Activist investor Eric Jackson at SpringOwl Asset Management LLC has called for Redstone and Dauman to step down from Viacom in a report outlining a plan to boost the company’s stock price.

A judge in California last month blocked a request by Herzer to have Redstone interviewed by her lawyers, while allowing limited questioning of the billionaire’s attorneys and possibly Dauman.

Redstone is ranked No. 306 on Bloomberg’s list of global billionaires, with a net worth of $4.4 billion, and his lawyers have alleged that Herzer is concerned only about her share of his estate. Another judge in California agreed in November, saying Redstone was receiving good care and there was no rush to have him examined before a decision on whether Herzer’s lawsuit should proceed.

Herzer’s Lawyer

“Mr. Dauman has been ordered by the Los Angeles probate court to give sworn testimony in Mr. Redstone’s competency proceeding,” Pierce O’Donnell, an attorney for Herzer, said in a statement. “Mr. Dauman filed a declaration claiming that his boss continued to be active in managing Viacom and Mr. Redstone ‘spoke’ about complex business issues. His deposition will reveal the falsity of these claims.”

The New York case is Dauman v. Herzer, 150412/2016, New York State Supreme Court, New York County (Manhattan). The California case is In re Advance Health Care Directive of Sumner M. Redstone, BP168725, Los Angeles County Superior Court. The Delaware case is E.F. Greenberg v. Viacom Inc and CBS Corp., CA No. 11907, Delaware Chancery Court (Wilmington).

Related tickers:
VIAB US (Viacom Inc.)
CBS US (CBS Corp)

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