Sumner Redstone Settlement Delay "Not Over Monetary Issue"

"We remain hopeful that we can resolve our differences," says Manuela Herzer's attorney. "A settlement is in everyone's best interests."
Christopher Patey

Settlement talks over the control of media mogul Sumner Redstone's health care have run into complications, but one of the attorneys involved in the case says the issues do not involve financial matters.

Pierce O'Donnell, who represents Redstone's former companion Manuela Herzer, who is seeking to regain control of medical decision-making for Redstone, tells The Hollywood Reporter that negotiations are continuing.

"We have hit a snag in the documentation," he says. "It is not over [a] monetary issue. We remain hopeful that we can resolve our differences. A settlement is in everyone's best interests. But if we have to go trial, we look forward to it."

There were reports late Monday that talks had broken down and the case appeared to be heading back to trial. Herzer has described the Viacom founder as a "living ghost" and claimed he is not mentally competent to make decisions regarding himself and his companies. She sued to regain control of his care, which had been transferred to newly minted Viacom CEO Phillipe Dauman.

Redstone's attorneys had argued Herzer was trying to invade Redstone's privacy for financial reasons. Dauman had been scheduled to be deposed, but that was put off in light of settlement talks.

The exact specifics of the proposed settlement haven't been disclosed, but sources close to the situation tell THR the deal includes a payout to Herzer, keeps Viacom in Dauman's hands and will eventually put Redstone's daughter Shari in control of his medical care.

Another source with knowledge of the situation expressed the same sentiment: Activity on the deal is ongoing, but an agreement has not yet been signed.

“There are a lot of moving parts and a lot of nonmonetary deal points, procedures and protocols that need to be fleshed out,” the source says. "Sometimes issues arise that need to be addressed in a complex settlement that has multiple layers."

A representative for Redstone's attorney declined to comment.

If the deal doesn't happen, a trial is scheduled to begin May 6.

The development in Herzer’s case comes a day after a Wall Street Journal report that puts Dauman at odds with one of his key executives, Paramount chief Brad Grey, over whether the ailing mogul approves of a plan to sell off part of the film studio. Dauman visited Redstone at his home in Beverly Park in mid-February and asked about selling a stake in the studio. Dauman "thought he heard a yes,” according to a person familiar with the conversation. Dauman relayed that to the Viacom board, saying a nurse would back his account.

But Grey, summoned to Redstone's home soon after Viacom's Feb. 23 revelation of the planned sale, later said to several people that Redstone had declared, "I don't want to sell Paramount." A source tells THR that Shari Redstone heard her father's exchange with Grey. Through a representative, Shari Redstone declined to comment. Grey did not respond to a request for comment.

Redstone is known to be unable to speak clearly. A speech therapist had to attend a recent evaluation by a geriatric psychiatrist done in connection with litigation brought by Herzer. She has been claiming Redstone is incapacitated and therefore wasn't capable of removing her as his health agent. Despite his declining health and speech, sources say Redstone apparently has been able to convey his vehement opposition to the sale of all or even part of Paramount.

Redstone is Viacom's founder and technically still controls the company through his majority position in the company's voting shares, so he could conceivably prevent Dauman from following through on his plans for Paramount, though he has presumably chosen not to do so. Also, insiders say that Redstone might not be as opposed to the deal as some are suggesting, given that he took part in some board meetings where the plan was discussed and he never indicated he was against it. In fact, no board member voiced opposition to the plan in those board meetings, including Shari Redstone, an insider said.

Insiders also say there are more than three dozen parties interested in bidding on a piece of the iconic film studio that is often considered the crown jewel of Viacom, the conglomerate that owns MTV, Comedy Central, Nickelodeon and other TV channels. Dauman has been under pressure to do something dramatic to fix Viacom's ailing stock, and one of his responses was to announce at an investor conference that he was pursuing a strategic partner to take an ownership position in Paramount. Viacom's shares rose 5 percent on the news that day.

Viacom paid $9.8 billion for Paramount in 1994, but Wall Street analysts figure it is worth just $5.5 billion today, unless foreign bidders anxious for a foothold in the American film industry bid up the price. 

Kim Masters and Paul Bond contributed to this article. 

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