Redstone's Team in Settlement Talks in Competency Case -- Update
April 05 2016 - 2:12PM
Dow Jones News
By Keach Hagey
Representatives of Sumner Redstone have entered talks to settle
a legal dispute with a former companion who challenged the media
mogul's mental competency, according to people familiar with the
matter, the latest twist in a drama that has riveted Hollywood and
Wall Street.
The former companion, Manuela Herzer, filed a suit in November
claiming that Mr. Redstone, the 92-year-old controlling shareholder
of Viacom Inc. and CBS Corp., was mentally incompetent when he
removed her as his health-care agent and kicked her out of his Los
Angeles mansion. Mr. Redstone's team had argued the suit was
without merit and was fighting it.
The litigation has been suspended pending the settlement talks,
the people familiar with the matter said. Viacom Chief Executive
Philippe Dauman -- the person with authority over the mogul's care
in case he's incapacitated -- was scheduled to be deposed in the
case Tuesday, but that no longer will happen, the people said.
For Viacom, a settlement would sidestep the embarrassment of a
trial, which is set for May. It also would avoid the prospect of a
judge ruling on the condition of Mr. Redstone, whose health has
declined in recent years after mini-strokes and other problems that
have made it hard for him to speak.
Mr. Dauman said in an affidavit late last year that Mr. Redstone
was "engaged and attentive" on a recent visit, while Ms. Herzer
described him as a "living ghost."
The deposition of Mr. Redstone's daughter, Shari Redstone,
originally scheduled for Wednesday, also has been canceled, the
people said. She has been the driving force behind the settlement
talks, which began about a week ago, according to people familiar
with the matter. Ms. Redstone is vice chairman of Viacom and
CBS.
Among the questions being debated in the settlement talks are
who will be Mr. Redstone's health-care agent going forward, as well
as other reforms to his health care and the size of Ms. Herzer's
financial award, the people said.
Ms. Herzer, who had at one time been romantically involved with
Mr. Redstone but in recent years served as his live-in companion
and caregiver, was due to inherit $50 million in cash and real
estate valued at $20 million, until Mr. Redstone changed his will
last October after he kicked her out of his house, according to
court documents.
Mr. Redstone's lawyers have alleged that she was motivated by
money, but Ms. Herzer's lawyers have maintained she filed the suit
out of concern for Mr. Redstone. Gabrielle Vidal, an attorney for
Loeb & Loeb, which is working for Mr. Redstone on the case,
declined to comment through a spokeswoman. Ira Steinberg, an
attorney at Greenberg Glusker Fields Claman & Machtinger, which
is working for Ms. Herzer, also declined to comment.
Mr. Redstone controls nearly 80% of the voting shares of
broadcast giant CBS and Viacom, which owns cable networks such as
MTV and Nickelodeon as well as the Paramount Pictures studio. When
he dies or is deemed incapacitated, his holdings will be managed by
a seven-person trust.
As the drama over Mr. Redstone's personal affairs has played
out, Viacom's Mr. Dauman has been trying to turn around the
company, whose shares have slid due to investor concerns over the
future of cable television in a media landscape where streaming
video and cord-cutting are on the rise. Mr. Dauman was named
executive chairman after Mr. Redstone resigned in February.
Write to Keach Hagey at keach.hagey@wsj.com
(END) Dow Jones Newswires
April 05, 2016 13:57 ET (17:57 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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