Viacom fight heats up as CEO, 4 others kicked off board
Media mogul Sumner Redstone has moved to replace five board members of Viacom Inc., including the chairman and CEO whom he has considered a surrogate son.
Dauman remains CEO of Viacom, which owns Paramount Pictures, BET, Comedy Central, MTV and Nickelodeon.
Manuela Herzer, the former girlfriend and live-in companion of media billionaire Sumner Redstone is seeking a new trial to show he’s mentally not competent to make health care and legal decisions and that he is under the influence of his daughter Shari Redstone.
Dauman has argued in court papers that Redstone was being manipulated by Shari Redstone, his daughter. The elder Redstone has issued statements questioning the value of selling off a piece of Paramount, the movie studio owned by Viacom that has suffered from poor operating performance.
In an attempt to prevent Shari from following through on her removal of Dauman and the other board members, Salerno has filed suit in a DE court to prevent the moves from being approved.
Salerno, according to the lawsuit, “promptly informed Viacom’s Governance and Nominating Committee about Shari’s threat”.
The case was filed in DE because Viacom is incorporated there along with more than half of the U.S.’s publicly traded companies and 63 percent of Fortune 500 firms. One of these members includes CEO Philippe Dauman, who has been Redstone’s biggest target for months. “A new law firm never before associated with you recently delivered a notice claiming you amended Viacom’s bylaws, taking away significant responsibilities from your board”, Salerno says in the letter.
A spokesman for Dauman had no comment.
National Amusements petitioned the Delaware Court of Chancery to affirm the changes, and said the new appointments won’t be effective until the court rules.
National Amusements said it would oust Abrams, Dauman, Salerno, Blythe J. McGarvie, and William Schwartz.
Viacom has for months suffered from lower ratings at many of its flagship networks.
Both are longtime confidants of Sumner Redstone and have alleged in court that Shari Redstone has isolated her father in order to take power in Viacom, where she is vice chair. Dauman and Abrams want proof of that, asking for Redstone to submit to an immediate medical examination. The executives have sued in MA court to challenge their dismissals, arguing that Ms. Redstone is engineering the changes by taking advantage of her father, and that Mr. Redstone doesn’t have the mental competency to carry out the changes.
FOLKENFLIK: Well, part of it may well be the desire by Shari Redstone to control the future of this company. I am determined to act in the best interests of the company and all of its shareholders. “The board has been significantly upgraded”, it said.
“I think this was the more conservative course and honestly I’d be surprised if a judge didn’t do that (approve the changes)”, he said.