Viacom CEO to Get Court Hearing -- WSJ

By Joe Flint 

A Massachusetts judge has granted the request from Viacom Inc. Chief Executive Philippe Dauman and board member George Abrams for a speedy hearing in their legal battle with Shari Redstone, the daughter of Viacom's controlling shareholder, Sumner Redstone.

The two filed a lawsuit on Monday to invalidate their removal from a trust designed to oversee the media mogul's holdings should he die or be declared incapacitated. They also want to be reinstated to the board of Mr. Redstone's holding company, National Amusements Inc., which oversees his controlling stakes in Viacom and CBS Corp.

A hearing has been scheduled for June 7 by Judge George Phelan of the Norfolk Country Probate and Family Court in suburban Boston. National Amusements is based in Massachusetts.

In the suit, Mr. Dauman accused Ms. Redstone of "attempting to illegally hijack her father's well-established estate plan" and trying to mount an "unlawful corporate takeover" that could have "far-reaching consequences for thousands of shareholders and employees of Viacom."

Ms. Redstone has denied she is behind the dismissals of Mr. Dauman, who is also Viacom's chairman, and Mr. Abrams from the trust and has called the suit meritless.

Viacom board members have been rebuffed in recent efforts to meet with Mr. Redstone, who celebrated his 93rd birthday on Friday with family including Ms. Redstone.

Frederic Salerno, Viacom's lead independent director, was asked earlier this week by Michael Tu, a lawyer retained by Mr. Redstone, to submit a written agenda for a meeting with the mogul, who is in poor health. Mr. Salerno responded with such an agenda.

On Thursday, Mr. Salerno wrote that his board position should accord him "unfettered and unfiltered access, which has been Sumner's policy in the past."

A spokesman for Mr. Redstone said a response would be forthcoming in the near future.

Investors are expecting Mr. Redstone soon to make changes to Viacom's board.

"It's a question of when, not if," said Mario Gabelli, who holds the second-largest voting stake in Viacom behind Mr. Redstone. Mr. Gabelli defended Mr. Dauman's recent moves, including signing a new distribution agreement for Viacom's cable networks with the satellite broadcaster Dish Network Corp. However, the legal bickering is wearing on him. He said he didn't like the fact that Mr. Dauman and Mr. Abram's suit named Mr. Redstone's grandchildren as nominal defendants. All beneficiaries of the Redstone trust were named as nominal defendants in the suit.

Viacom's board is gearing up for a court fight in Delaware, where the company is incorporated, should National Amusements try to dismiss Viacom directors or push for the firing of Mr. Dauman as CEO, people familiar with the matter said.

A spokesman for Mr. Redstone said on Friday that "Sumner Redstone will make every decision with the same deliberation and consideration with which he removed Philippe Dauman and George Abrams as trustees, based on the best interests of shareholders."

Meanwhile, activist investor Eric Jackson , of SpringOwl Asset Management LLC, has renewed his push for Mr. Dauman and Viacom's board to be replaced. Mr. Jackson said on Friday that Viacom should be merged with broadcaster CBS, and CBS Chief Executive Leslie Moonves put in charge of the merged company.

A CBS representative had no comment. In the past, Mr. Moonves has played down the idea of recombining CBS and Viacom; the two were split a decade ago.

Write to Joe Flint at [e-mail]

(END) Dow Jones Newswires

May 28, 2016 02:48 ET (06:48 GMT)

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