Redstone’s Lawyer Says Mogul Is Old, Not Impaired

  • Viacom’s Dauman says Sumner Redstone should have medical exam
  • Fight over Redstone’s trust that controls media empire

Sumner Redstone isn’t mentally impaired, just old, his lawyer told a judge in Massachusetts in arguing against a request by Viacom Inc. Chief Executive Officer Philippe Dauman to have the billionaire medically evaluated.

“The idea that he could suffer from mortal disease at any time -- you could say that about any elderly person,” Redstone’s lawyer, Robert Klieger, said during a hearing Tuesday. “Neither his physical or mental condition are deteriorating.”

Dauman and Viacom director George Abrams sued last month after Redstone removed them from a trust that controls his $40 billion media empire. Lawyers for the men, who are seeking to be reinstated, urged a judge to hold a quick trial over their claims that the 93-year-old Redstone was mentally impaired when he made the decision to oust them and is being manipulated by his daughter Shari.

“Nobody can reasonably deny that Sumner Redstone will not be long available,” said Les Fagen, an attorney for Dauman and Abrams. “The question my clients ask, not out of self interest but out of fiduciary duty, they want to know whether the Sumner Redstone they knew would ever do this to his closest friends.”

Delayed Ruling

Probate Judge George Phelan said he may rule on the request for an expedited trial schedule before the end of June, when he expects to hear arguments on motions to dismiss.

“I have a lot to digest,” Phelan said at the end of the hearing. “I grew up in a housing project where I was lucky to have a quarter in my pocket, so I’m trying to digest the concept of billion with a B.”

The dispute is being heard in state probate court in Canton, Massachusetts, about 20 miles (32 kilometers) south of Boston in the county where the trust was created. It’s one of two courts on separate coasts being asked to decide the legal battle over Redstone’s mental capacity and his ability to make decisions even as the billionaire takes steps to reassert control over Viacom, the owner of MTV and Paramount Pictures.

Good Health

Klieger said the billionaire is in good health, contrary to speculation about his imminent demise, and was hospitalized only once since last fall so doctors could monitor his reactions to new medications. While Redstone’s speech can be difficult to understand, the billionaire says vulgarities “with remarkable clarity,” he added.

Redstone is seen and examined at least twice per week by his treating physician, according to court papers filed Monday. Despite his physical limitations, including limited mobility and a severe speech impairment, Redstone exercises daily and has the energy for frequent excursions to visit with his grandson, the doctor, Richard Gold, said in an affidavit.

A brain scan conducted on Redstone in November showed no evidence of a stroke and “revealed minimal if any atrophy,” Gold said. Redstone was hospitalized for four days last month to be monitored for minor changes in his health and his reaction to new medication, according to the filing. Gold didn’t detail the health changes.

Dueling Lawsuits

Redstone filed his own lawsuit in Los Angeles seeking court approval of his decision to fire Dauman and Abrams. The lawsuit, which seeks to have the dispute heard in California, was filed on the same day Dauman filed his complaint in Massachusetts. Shares of Viacom, which were down more than 40 percent last year, have rallied in the wake of Redstone’s moves.

The billionaire said June 3 that he had the backing of four out of seven trustees, which means Dauman and Abrams will be out of the trust even if they win their case.

At the heart of Dauman’s complaint is the contention that Redstone isn’t speaking for himself. He argues that Redstone suffers from dementia and is under the undue influence of his once-estranged daughter in a plot to take control of the trust’s majority stakes in Viacom and CBS Corp.

Undue Influence

Fagen told Phelan on Tuesday that while the trust agreement doesn’t define the term “undue influence,” the burden of proof is on Shari to disprove it. Redstone’s trust agreement is private. Lawyers gave Phelan a copy of the documents on Tuesday for review.

Shari Redstone isn’t acting as her father’s fiduciary and isn’t in charge of his care, Klieger told Phelan. The billionaire, who has an independent care manager, leaves the house to visit family and has friends in Malibu, the lawyer said.

“He is not a prisoner in his own house,” Klieger said.

For Questions and Answers surrounding the dispute, click here.

Redstone said in court papers that he lost faith in Dauman after he and Abrams acted against his wishes. The duo removed Redstone as Viacom’s chairman, ignored his opposition to shopping a Paramount stake, shunned requests for information and basically treated him “as if he was already gone,” according to the filing. Redstone said he feared Dauman would answer to no one if he held the top two posts at Viacom while controlling the trust.

As an example of Redstone’s lucidity, attorney Klieger recounted a meeting at the magnate’s home earlier this year in which Redstone asked him to deliver to Viacom executives a message telling them not to sell off Paramount.

Dauman’s attorney countered that the anecdote instead showed Redstone was slipping as he would never entrust Klieger, then a relative stranger, with such a message.

“Does this sound like the act of a competent man?,” Fagen asked. “Or does it sound like a man who’s kind of left in prison trying to get a message out?”

On Monday, Viacom’s controlling shareholder, Redstone’s National Amusements Inc., amended the media company’s bylaws requiring unanimous board approval for any deals involving Paramount. Sumner and Shari Redstone are both on Viacom’s board.

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

(An earlier version of this story corrected the misspelling of Robert Klieger’s last name.)

(Corrects spelling of lawyer’s name in eighth paragraph in story that appeared June 7.)
Before it's here, it's on the Bloomberg Terminal.
LEARN MORE