By Keach Hagey 

Viacom Inc. Chief Executive Philippe Dauman is challenging the validity of a move by Sumner Redstone's lawyers to remove him from the trust that will eventually control Mr. Redstone's media empire.

Mr. Dauman and Viacom board member George Abrams were informed that they have been removed from the trust by a law firm claiming to represent Mr. Redstone, according to a spokesman for Mr. Dauman.

"These steps are invalid and illegal," the spokesman said late on Friday. "As court proceedings and other facts have demonstrated, Sumner Redstone now lacks the capacity to have taken these steps. Sumner Redstone would never have summarily dismissed Philippe Dauman and George Abrams, his trusted friends and advisers for decades."

The two men were also removed from the board of National Amusements Inc., the holding company that owns the controlling shares of Viacom and CBS Corp.

On Saturday morning, Michael Tu, an attorney at the Los Angeles law firm Orrick, Herrington & Sutcliffe that claims to represent Mr. Redstone in the action, called Mr. Dauman's statement "attacking Mr. Redstone's capacity disappointing and incorrect, as reflected by Mr. Dauman's own testimony given under oath less than six months ago that Mr. Redstone is as 'engaged, attentive and as opinionated as ever.'"

He also confirmed the removal of the two men from the trust and the National Amusements board had taken place on Friday, and he shed more light on the reasons behind it.

"Sumner Redstone took decisive and lawful action [on Friday], which he firmly believes is in the best interests of Viacom Inc. and its stockholders, when he removed Philippe Dauman and George Abrams as trustees of his Trust and directors of National Amusements, Inc." Mr. Tu said. "Mr. Redstone acted after he expressed his concerns regarding Viacom's performance to Messrs. Abrams and Dauman, both Viacom directors, and received no response from them."

Viacom's share price has dropped more than 40% over the past year.

Removing Mr. Dauman would be a big victory for Shari Redstone, Mr. Redstone's daughter and the vice chairman of Viacom and CBS, who has clashed in the past with the executive and was the lone Viacom board member not to vote for his recent promotion to executive chairman.

Ms. Redstone, Mr. Dauman and Mr. Abrams were three of the seven members of the trust Mr. Redstone set up to take over his nearly 80% voting stakes in both Viacom and CBS when he dies or is incapacitated. Other members include Ms. Redstone's son and her mother's divorce attorney.

On Saturday, a Viacom spokesman accused Ms. Redstone of manipulating her father to engineer the ouster in order to take control of National Amusements Inc. and Viacom.

"The actions taken yesterday in Sumner Redstone's name are completely inconsistent with his long-expressed wishes and intent and extremely disruptive and damaging to Viacom and all its shareholders," the spokesman said. "There has been no communication from Sumner Redstone. In fact, during an in-depth strategy session of Viacom's Board Tuesday evening and all day Wednesday, not a sound was heard from Sumner, who was connected by phone. Shari Redstone, also connected by phone, did not raise a single concern during the Board session on any topic."

The spokesman said Mr. Tu was "previously unknown until this week to anyone associated with Sumner other than Shari Redstone" and had been unable to confirm to the board's independent counsel that he had even met with Mr. Redstone. Mr. Tu couldn't immediately be reached for comment on whether had communications with Mr. Redstone.

"It is clear that Shari Redstone has isolated her father and put his residence on lockdown, which provides clear evidence of her exercise of undue influence," the spokesman continued. "Despite many attempts by members of Viacom's board, including the lead independent director, to meet with Sumner they have been denied access."

"l fully support my father's decisions and respect his authority to make them," said Ms. Redstone in a statement.

Mr. Abrams declined to comment.

Fortune earlier reported the removal of Messrs. Dauman and Abrams from the trust.

Questions about the 92-year-old Mr. Redstone's condition have only intensified since a lawsuit challenging his mental competency was tossed out by a California judge earlier this month. The suit was filed by his former companion, Manuela Herzer, who said he lacked mental capacity when he evicted her from his house and removed her as his health-care agent this past October.

During the legal battle, Ms. Herzer characterized Mr. Redstone as a "living ghost" while Mr. Dauman had said in an affidavit that he had been "engaged and attentive" during meetings last fall.

Mr. Redstone's profanity-laced deposition in the case was enough to convince the judge that the former executive didn't want Ms. Herzer back in charge of his health care. But the transcript revealed his extreme difficulty communicating and his inability to answer some basic biographical questions, deepening concerns within the Viacom board about his role in the company, according to people familiar with the matter. Earlier this week, the Viacom board voted to stop paying Mr. Redstone entirely.

Mr. Dauman has been Mr. Redstone's most-trusted confidant for three decades, ever since as a young mergers and acquisitions lawyer he helped Mr. Redstone take over Viacom in 1987. But in recent months, their relationship has come under strain, as Mr. Redstone voiced opposition to Mr. Dauman's plan to sell a minority stake in Paramount Pictures, according to people familiar with the matter. Paramount was another of the great corporate trophies the two men had once won together.

 

(END) Dow Jones Newswires

May 21, 2016 14:42 ET (18:42 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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