Philippe Dauman Files Lawsuit Challenging Removal from Sumner Redstone Trust

Sumner Redstone_Philippe Dauman Split - Getty - H 2016
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Sumner Redstone_Philippe Dauman Split - H 2016

The fight over the future of Viacom is again escalating on Monday as chief executive Philippe Dauman and George Abrams have together filed a lawsuit challenging their removal from the Sumner Redstone National Amusements Trust.

A complaint has been filed in the Commonwealth of Massachusetts Probate and Family Court and seeks a ruling to invalidate the changes announced on Friday night. Over the weekend, a spokesperson for Redstone said the removal of Dauman and Abrams was necessary given Viacom's performance and their intention to sell Viacom's subsidiary Paramount Pictures. Dauman is expressing concern about Shari Redstone's influence over her father, and the new lawsuit will be the latest to probe the competency of media mogul Sumner Redstone, who will turn 93 later this month.

“Shari Redstone is attempting to illegally hijack her father’s well-established estate plan by removing professional managers and reportedly installing her daughter, an employee and a friend who are firmly under her control," said Dauman in a statement. "We all continue to have great respect and affection for Mr. Redstone, but he is clearly being manipulated by his daughter, Shari. After years of estrangement, she has inserted herself into his home, taken over his life, and isolated him from anyone not under her control, including longtime business colleagues. In fact, she has recently and repeatedly arranged to deny requests for Viacom board members to meet with her father."

Dauman and Abrams (a longtime Redstone attorney) have been ousted from the seven-member Trust that exerts its influence over National Amusements, which owns 80 percent of both Viacom and CBS' stock.  National Amusements general counsel Tad Jankowski, family friend Jill Krutick and possibly Redstone's granddaughter Kimberlee Ostheimer are being eyed as replacements.

The three are seen as being much closer to Shari Redstone, who has been at odds with Dauman, and the latter is fighting back. According to the complaint filed in Massachusetts, Shari has been the "dissenting voice" in the Viacom boardroom, her "press campaign has included false and misleading statements regarding Viacom’s performance," and when Viacom directors voted to replace Sumner Redstone as chairman in February, "Shari cast the lone vote against Mr. Dauman."

The complaint follows on the heels of an unsuccessful petition by Sumner Redstone's longtime companion Manuela Herzer, who was thrown out of his home and attempted to reclaim her position as his healthcare agent. Back in November, Dauman said in a declaration that Redstone was "engaged and attentive," but now his lawsuit states the elder Redstone "cannot initiate or participate in meaningful conversation, including discussions concerning his business or personal affairs. His ability to understand and assess the consequences of his actions is limited. Indeed, during the first week of March, Mr. Dauman visited Mr. Redstone and Mr. Redstone appeared almost totally non-responsive, and could not meaningfully communicate at all."

The complaint also asserts that Redstone's moves to oust him from the Trust are being handled by "a lawyer with whom Mr. Redstone has never before been associated."

Dauman puts the blame on Shari.

"Her singular goal is to assume complete control of his businesses, despite Mr. Redstone’s long-term desire for a professionally managed Trust and an independent Board of Directors," added Dauman in his statement. "Shari’s actions amount to an unlawful corporate takeover, and if effectuated, could have far-reaching consequences for thousands of shareholders and employees of Viacom.”

This morning a representative for Shari Redstone said in a statement on her behalf, "It is absurd for anyone to accuse Shari of manipulating her father or controlling what goes on in his household. Sumner makes his own decisions regarding whom he wants to see both in his home and elsewhere, and he has his own team of independent advisors to counsel him on corporate and other matters. As to the idea that Shari, an attorney and respected businesswoman, would ‘unlawfully’ use his name, that is utterly ridiculous."

In launching the lawsuit, Abrams says, "For over 25 years Sumner has discussed his will and various Trusts with me and I was instrumental in setting up this Trust at the time of his divorce. He has impressed on me his wishes that the Trust be managed in a professional manner and that the children of his son and his daughter be treated fairly and equally despite some internal family conflicts. He also discussed at length with me his feelings about Viacom and CBS and the future of both companies. The changes purportedly being made would alter his previously and repeatedly expressed wishes. As a result of some of the information which has recently been received, I believe a court test on the question of undue influence is necessary.”