3:19pm PT by Ashley Cullins
National Amusements Directors Pen Snarky Letter in Response to Viacom Board Unrest
The decision to remove nearly half of the Viacom board directors would still be valid even if Sumner Redstone lacks capacity or is being unduly influenced by his daughter, according to a letter sent Tuesday on behalf of the media mogul's trust.
“Based upon statements made by or on behalf of the Viacom Board in recent weeks, there is a clear lack of understanding regarding the authority under which National removed and replaced five of Viacom’s eleven directors, and an apparent belief that attacks on Sumner Redstone’s capacity or alleged ‘undue influence’ would somehow undercut that authority,” states the letter from National Amusements. “To help you understand why that is not the case, we offer a brief primer on National’s governance.”
The eight-page letter lays out how and why those board members would have been replaced, even if Dauman and Abrams hadn’t been removed as trustees first. In a nutshell: They would have been outvoted.
Fred Salerno’s lawsuit alleging Shari Redstone is breaching her fiduciary duty also is addressed in the letter.
"Needless to say, these highly personal and vicious attacks on Sumner’s capacity and Shari’s honesty and integrity are offensive and unacceptable,” states the letter. “More importantly, however, those allegations, even if they could somehow be proven, would have no impact on the legitimacy of National’s actions with respect to Viacom."
Two scenarios are spelled out for the readers, one in which Sumner has capacity and the other in which he does not, and both have the same end result.
"In short, however the attacks on Sumner's capacity or alleged undue influence might be resolved, National's removal and replacement of five of Viacom's eleven directors will not be disturbed," ends the letter.
A Viacom spokeswoman responded with a statement Tuesday afternoon: “In today’s letter, the supposed directors of National Amusements have claimed that Sumner Redstone’s incapacity or undue influence does not matter. It matters a great deal to Viacom’s shareholders and Viacom’s board if Sumner Redstone lacked capacity or was unduly influenced in the making of recent and dramatic governance changes. Under the law, the implications would be grave if a Court were to rule that recent changes were infected by Shari Redstone’s undue influence and any improper acts allegedly in Sumner Redstone’s name. Any ‘vote’ made under these circumstances would be meaningless. Individuals who have taken part in such a scheme could and should be ruled unfit to serve as trustees or board members.”
The full text of the letter from National Amusements is below.
June 28, 4:25 p.m. Updated with a statement from Viacom.