Viacom’s Dauman Says ‘Time Is of Essence’ for Redstone Exam

  • Dauman fighting ouster from trust controlling Redstone empire
  • Parties set to appear Tuesday in state court in Massachusetts

Viacom Inc. Chief Executive Officer Philippe Dauman said it’s imperative that Sumner Redstone be subjected to an immediate medical exam as Dauman seeks to block his removal from a trust that controls the mogul’s $40 billion media empire.

Dauman said in a court filing Monday that "time is of the essence," as Redstone’s daughter Shari and other trustees are trying to prevent a "prompt and fair" examination that may also determine whether Shari has had undue influence on her father.

"He is a 93-year-old man suffering from numerous physical ailments, including an inability to speak, stand, walk, eat, write or read," the CEO said in the court papers. "He suffers from a progressive neurological disease characterized by dementia.”

Dauman and Viacom director George Abrams were removed by Redstone from the trust and the board of the family holding company. Redstone said in a filing Friday that he’s lost faith in Dauman who, he said, would be accountable to no one if he controlled the trust at the same time as he’s chairman and chief executive of Viacom.

Dauman and Abrams sued in Massachusetts May 23 over their ouster, claiming Redstone is mentally impaired and being manipulated by his daughter. They say a speedy trial is needed to resolve the dispute because the trust’s assets are being threatened by Shari Redstone’s “invalid attempt” to take control of its majority stakes in Viacom and CBS Corp.

For Questions and Answers surrounding the dispute, click here.

Redstone’s mental capacity is at the heart of litigation in two states concerning his ability to make decisions about his estate and the future of his media empire. Shares of Viacom had fallen 40 percent over the past year before rallying as Redstone began to reassert his control over the company, the owner of Comedy Central, Nickelodeon and Paramount Pictures.

A hearing is scheduled Tuesday in Canton, about a half-hour south of Boston, for arguments on whether the proceedings should be expedited. Redstone on Friday said the majority of trustees who will one day oversee his media empire back Dauman’s and Abrams’s removal.

The support of four of seven trustees means Dauman and Abrams will be off the trust, and off the board of Redstone’s National Amusements holding company, even if they prevail in their lawsuit challenging their removal, according to Redstone’s Friday filing opposing an expedited trial.

Sumner’s Resolve

Dauman and Abrams “miscalculated not only Sumner’s resolve, but also the commitment of their fellow trustees to do the right thing," according to the filing.

Dauman and Abrams claim their removal from the trust is part of a plot by Shari to assume control of her father’s business, which they say he has “long refused her.” Shari was the sole Viacom director who voted against Dauman’s promotion to chairman when her billionaire father stepped down from that role in February.

A psychiatrist who examined Sumner Redstone last month said he had the legal mental capacity to remove Dauman, according to a report filed in the Massachusetts court last week.

James Spar, a geriatric psychiatrist at the University of California, Los Angeles, said Redstone told him he wanted Dauman removed because “he’s done a bad job” and that Dauman opposes his decision to sell a stake in Viacom’s Paramount Pictures, according to the report.

‘Distorted View’

Spar’s statement presents a one-sided, distorted view of Redstone’s mental state, is contradicted by evidence showing that he was suffering from a neurological disorder and a victim of impairment and dementia, who was subject to undue influence, Dauman and Abrams claimed.

Spar’s statement "reads like an interview or deposition summary, as if Mr. Redstone was capable of conducting a conversation," Dauman and Abrams said. "In fact, as even Dr. Spar effectively acknowledges, Mr. Redstone is unable to meaningfully speak at all."

Redstone is physically stable, engaged with his attorneys, taking part in strategic decisions and making his views clear, as Spar indicated in his report, according to a statement his advisory team sent Monday.

Nancy Sterling, a spokeswoman for Shari, declined to comment on Monday’s court filing.

The case is Dauman v. Redstone, 16-E0020, Massachusetts Probate and Family Court, Norfolk County (Canton).

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