Judge Lets Lawsuit Over Viacom Board Upheaval Move Forward

For the second time in two days, a judge won't dismiss a battle over Sumner Redstone's competency.
Michael Tran/FilmMagic; Amanda Edwards/WireImage
Shari Redstone, Sumner Redstone

The Redstones are 0-for-2.

Andre Bouchard, a judge at Delaware Chancery Court, has rejected a motion to dismiss Viacom's lead independent director Frederic Salerno's lawsuit that challenges the attempted removal of Philippe Dauman and four fellow board members from the media company's board.

The ruling allowing the case to move to the discovery stage follows what happened in Massachusetts probate court on Thursday, when Dauman also was allowed to march forward on claims that Shari Redstone is unduly influencing her 93-year-old father, Sumner Redstone.

Salerno's lawsuit contends that Shari is breaching her fiduciary duties and disrupted decades' worth of Redstone estate planning to grab control of a media empire that includes CBS. National Amusements directors David Andelman and Leonard Lewin (the divorce lawyer for Sumner Redstone's first wife) also are accused of wrongfully taking Shari's side instead of duties to the company.

Both cases are currently scheduled for trial in October, although nobody should book trips just yet. The judges in both cases only decided that minimum pleading thresholds had been met and both will likely have a future opportunity to rule as a matter of law after parties have gathered facts about Sumner's condition and Shari's communications. A trial will happen only if the judges decide there are contestable issues of fact. In the meantime, multiple inside sources continue to insist that a settlement wherein Dauman would take a reduced role at Viacom is a strong possibility.

In reaction to the ruling, a Viacom spokesperson says, "We look forward to revealing the truth as we prepare for trial."

Redstone-controlled National Amusements, which owns 80 percent of Viacom, issued its own statement: "We look forward to demonstrating the integrity of these changes, which were ratified unanimously by National Amusements' board and would be approved again by a majority regardless of the outcome of the case."

That latter point is hardly a certainty given the suggestion made by Dauman's camp in legal papers that there could be grounds for deeming National Amusements board members who participated in the removal of Dauman to be "unqualified to continue serving as trustees."

The parties involved in Salerno's lawsuit have agreed to pause any turnover on the Viacom board as the litigation plays out.

comments powered by Disqus