Possible Accord Reached in Family Battle Over Sumner Redstone Trust -- 2nd Update

By Joe Flint 

A peace treaty appears likely in the feud between Shari Redstone and her niece Keryn Redstone.

At issue were changes made to media mogul Sumner Redstone's trust, which will oversee his controlling stakes in Viacom Inc. and CBS Corp. after he dies or is declared incapacitated. In May, Viacom Chairman and then-CEO Philippe Dauman and board member George Abrams were removed as trustees and sued to be reinstated.

Keryn Redstone, a beneficiary of the trust, claimed it was her aunt Shari Redstone and not her 93-year-old ailing grandfather making the changes as part of a power grab. Keryn Redstone joined in their legal battle, which also argued that Shari Redstone was behind the moves -- charges she has repeatedly denied.

Last week, Messrs. Dauman and Abrams agreed to drop their suit as part of a broader settlement with National Amusements Inc., which is the vehicle through which Mr. Redstone currently controls Viacom and CBS. Mr. Dauman agreed to step down as Viacom chief executive and will resign as nonexecutive chairman on Sept. 13.

Even after Viacom's board agreed to settle its legal battle with its controlling shareholder, Keryn Redstone didn't back down. A tentative settlement reached during a hearing in Massachusetts on Friday could be the final piece in putting to rest the long-running family feud and battle for control over the media empire.

The daughter of Mr. Redstone's estranged son, Brent, Keryn Redstone has long had an acrimonious relationship with her aunt. She joined the fight against the changes to the trust out of concern that she would be treated unfairly when it came to both planned distributions and any allocations in the future. She also pushed to be allowed to see her grandfather again.

During the hearing in Massachusetts, Robert Klieger, a lawyer for Sumner Redstone, said while the trust treats all five grandchildren equally, his client was open to reaffirming this through adjustments to the trust document.

Keryn Redstone will "get the assurances she wants that she won't be treated in an unfair manner," he said. According to Mr. Klieger, Mr. Redstone has also agreed to meet with his granddaughter, whom he hasn't seen since February.

A representative for Shari Redstone said: "The plaintiffs' claims filed against Sumner and Shari have been dismissed, the settlement agreement is firmly in place, and Sumner's decisions have been honored in all respects. This result benefits Viacom, National Amusements and all of the beneficiaries of Sumner's trust."

Among the Redstone grandchildren, Keryn Redstone was the only outlier. Shari Redstone's children and Keryn Redstone's sister, Lauren Redstone Ellis, were all in support of the recent changes to the trust.

Keryn Redstone said she was grateful for the opportunity to see her grandfather and that the trust will be "amended to make it ironclad and bulletproof" to protect her from being discriminated against in the administering of the trust. Ms. Redstone's share of the trust is about $1 billion, according to her lawyer Pierce O'Donnell who said, "Keryn could not be happier."

A status hearing on the settlement talks has been scheduled for Sept. 23.

Write to Joe Flint at [e-mail]

(END) Dow Jones Newswires

August 26, 2016 22:12 ET (02:12 GMT)

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