Judge Hears Arguments in Viacom CEO's Suit Against Redstone
June 30 2016 - 6:50PM
Dow Jones News
CANTON, Mass.—A Massachusetts judge Thursday sought information
on Sumner Redstone's health and estate planning as he weighs
whether to dismiss a suit claiming the 93-year-old media mogul
lacked the mental capacity to have made recent decisions affecting
his business empire.
The suit was brought by Viacom Inc. Chairman and Chief Executive
Philippe Dauman and board member George Abrams, who were removed
from the trust that will oversee Mr. Redstone's controlling stakes
in Viacom and CBS Corp. after he dies or is declared incompetent.
The men were also removed from the board of Mr. Redstone's holding
company, National Amusements.
At a daylong hearing here in Norfolk Probate and Family Court,
packed with more than two dozen lawyers, Judge George Phelan
listened to both sides go back and forth on Mr. Redstone's
relationship with his daughter, Shari Redstone, who the plaintiffs
allege has exercised "undue influence" over Mr. Redstone. She has
denied manipulating her father.
The judge also heard a debate on whether a trial should be held
in Massachusetts, where the trust is administered, or California,
where Mr. Redstone has resided for 13 years.
"Obviously, I have a lot of new information to digest," Judge
Phelan said.
The Redstone camp is arguing that if Judge Phelan does not
dismiss the case, he should punt it to Los Angeles. There, it could
go before the same judge who in May dismissed another suit
challenging Mr. Redstone's competency, brought by former companion
Manuela Herzer. She sued to fight her removal as his health-care
proxy.
In the Herzer case, Judge David Cowan of Los Angeles Superior
Court ruled that Mr. Redstone's wishes with respect to Ms. Herzer
were clear, but didn't rule explicitly on the mogul's
competency.
On Thursday, Judge Phelan showed significant interest in the
previous trial. He questioned why his counterpart in California
didn't make a decision on mental competency.
Judge Phelan also grilled both sides about Mr. Redstone's fading
health and the challenges he has speaking. He sought detailed
information about how Mr. Redstone's speech is translated by a
nurse and a speech therapist and their relationships to him. He
also wanted to know about Mr. Redstone's relationships with his
doctor and new lawyer, Michael Tu, and how Mr. Redstone is kept
abreast of developments in his legal battles.
Mr. Redstone's legal team is arguing that the removals of
Messrs. Dauman and Abrams from the trust can't be challenged
because the mogul has not been declared incompetent either by a
judge or three doctors, as stipulated in the trust. Les Fagan, the
lawyer for the plaintiffs, challenged that interpretation, adding
that their removal "has been tainted and poisoned by Sumner
Redstone's lack of capacity."
The judge also got an earful about Ms. Redstone, with one side
portraying her as a loving daughter and the other saying she is a
power-hungry manipulator. "It is a character assassination of my
client in the worst way," said Ms. Redstone's lawyer, Elizabeth
Burnett.
What happens in Massachusetts could have major ramifications for
a legal battle in Delaware between Viacom and National Amusements,
through which Mr. Redstone controls his companies. National
Amusements earlier this month moved to oust five directors from the
Viacom board, including Messrs. Dauman and Abrams. Those removals
are also being challenged by Frederic Salerno, Viacom's lead
independent director.
Write to Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
June 30, 2016 18:35 ET (22:35 GMT)
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