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As the battle for control of the $40 billion media empire spanning Viacom Inc. and CBS Corp. was escalating over the summer, the 30-year-old grandson of controlling shareholder Sumner Redstone secretly reached out to Viacom's embattled chief executive, Philippe Dauman, to begin settlement talks.

Tyler Korff, a lawyer and rabbi, grew up knowing Mr. Dauman and worked alongside him as a fellow director of National Amusements Inc., the holding company through which the Redstone family controls Viacom and CBS. The two men had always maintained a good relationship despite tensions between Mr. Dauman and Mr. Korff's mother, Shari Redstone.

In June, Messrs. Korff and Dauman met with their lawyers—without anyone else's knowledge, including Ms. Redstone's—in a conference room at Viacom's Times Square headquarters in New York to begin what turned into hundreds of hours of negotiations, people familiar with the matter said.

Those previously undisclosed conversations laid the foundation for the August accord that provided a peaceful transfer of power atop Viacom—parent of MTV, Comedy Central and Paramount Pictures—through the exit of Mr. Dauman and an overhaul of the company's board. The changes increased the influence of National Amusements, which has since asked CBS and Viacom to explore a merger.

Mr. Korff's leadership in the settlement talks is one of several moves by the younger generation of Redstones into more prominent roles in the family business. His sister, Kimberlee Korff Ostheimer, 34, a lawyer who formerly worked for the Legal Aid Society and is now primarily caring for her two young children and focusing on philanthropy, was elected to the National Amusements board in late May. Their brother, Brandon Korff, 32, managing partner of real-estate developer Panoply Properties, became a National Amusements director in late September, according to the people familiar with the matter.

The three siblings have a lot riding on the fortunes of CBS and Viacom. They will become the beneficiaries of a trust that their 93-year-old grandfather, Mr. Redstone, has set up to take over his 80% voting stakes in the media companies when he dies or is deemed incapacitated. His holdings are currently valued between $3 billion and $5 billion, though the combined market value of the companies he controls is over $40 billion.

But it will likely be many years before they actually receive this wealth. According to people familiar with the trust, Mr. Redstone, his ex-wife, Phyllis Redstone, and his children Shari Redstone, age 62, and Brent Redstone, 65, all first would have to die. Then, the trust's assets—such as stock dividends or proceeds from the sale of real estate—apart from National Amusements stock would begin to be distributed for personal use once the eldest Redstone grandchild, Ms. Ostheimer, turns 40. The National Amusements stock, which contains the shares of Viacom and CBS, wouldn't be distributed until all the grandchildren reach 60.

Until these distributions, the grandchildren must rely on the discretion of the trustees to receive income from the trust. These seven trustees include Mr. Korff and Ms. Redstone, but only nonfamily trustees are allowed to give out disbursements, the people said.

A family of high-achieving lawyers, the Redstones have regularly battled each other over money, using legal action. Over the years, Sumner Redstone's brother, Edward, in addition to son, Brent, and nephew, Michael, have sued over family business dealings. Sumner and Shari had their own rocky history, before a rapprochement in recent years.

The Redstone grandchildren were drawn into litigation over Viacom's future this year because they are trust beneficiaries, according to court documents. They were forced to hire lawyers and asked to supply information in the discovery process, according to the people.

Brent Redstone's children, Keryn Redstone and Lauren Redstone Ellis, are also beneficiaries of the trust and currently don't have roles in the family business. Keryn Redstone has been at odds with her aunt Shari Redstone and recently secured a legal settlement to ensure that any trust disbursements would be equitable.

Mr. Korff followed in the footsteps of his father, Ira Korff, a prominent rabbi, earning a law degree at Brooklyn Law School at the same time as earning a rabbinical degree.

Today, Tyler Korff's law practice focuses on corporate and business law for tech startups like BugReplay. He has been a National Amusements director since 2013.

He became involved in the fight for control of Viacom because he was concerned about the effect on the business and his family, people familiar with the matter said.

The nasty fight broke out in late May when Mr. Dauman and fellow Viacom director George Abrams were removed from Mr. Redstone's trust, prompting them to sue for reinstatement in Massachusetts, where the trust is based. The suit challenged Sumner Redstone's mental capacity and said he was being manipulated by his daughter, a charge she denied.

Mr. Korff found Mr. Dauman to be a reasonable person and believed he would peacefully step down if he were given a path to do so with dignity, the people said.

Under the deal the men worked out, all litigation would cease, Mr. Dauman would leave as Viacom's chief executive and five board members would be replaced, but Mr. Dauman would have the right to present options for selling a stake in Paramount Pictures, a project he championed, and hand the reins to his second-in-command, Tom Dooley, who departs from the job Nov. 15. (The Paramount stake sale isn't moving ahead.)

When the draft deal was circulated to stakeholders, some Viacom directors were angry that Mr. Dauman had been negotiating without their authorization, and shut down the settlement talks for several weeks, the people familiar with the matter said.

The final version of the agreement included changes such as allowing the ousted board members to stay through the annual meeting next year.

These days, the special committees of the boards of Viacom and CBS—in Viacom's case, consisting almost entirely of new board members—are in the process of exploring a merger.

"It's been a tough year," Ms. Redstone said at the New York Times' DealBook Conference on Thursday, "but to be sitting here today and talk about all we have accomplished, I don't think I would have believed it."

Write to Keach Hagey at keach.hagey@wsj.com

(END) Dow Jones Newswires

November 13, 2016 20:15 ET (01:15 GMT)

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