Viacom CEO Dauman sues over removal from Sumner Redstone's trust

Viacom Chief Executive Officer Philippe Dauman and a longtime Viacom director went to court on Monday to stop a move that would remove them from a trust that will determine the direction of the media conglomerate and CBS.

Dauman filed a lawsuit in Massachusetts Probate and Family Court to stop Sumner Redstone, who ran Viacom for decades, from removing him and longtime director George Abrams from a trust that will make decisions about the media conglomerate and CBS if the 93-year-old Redstone becomes incapacitated or dies.

Plaintiffs in the legal complaint include directors of National Amusements, which controls Viacom and CBS. It seeks to invalidate the removal of Dauman and Abrams as directors of National Amusements, Redstone's privately held movie theater chain.

Sumner Redstone
Jason LaVeris | FilmMagic | Getty Images
Sumner Redstone

Redstone, who turns 93 on Friday, suffers from diminished mental capacity and is dependent on his daughter, Shari Redstone, the lawsuit said.

"Shari Redstone is attempting to illegally hijack her father's well-established estate plan," Dauman said in a statement on Monday morning. "We will continue to have great respect and affection for Mr. Redstone, but he is clearly being manipulated by his daughter, Shari."

A statement from his daughter said, "It is absurd for anyone to accuse Shari of manipulating her father ... Sumner makes his own decisions regarding whom he wants to see both in his home and elsewhere."

The complaint named Shari Redstone, her son Tyler Korff, as defendants and David Andelman, Norman Jacobs and Leonard Lewin as nominal defendants.

The lawsuit is the latest shot in the battle for control between Dauman and Shari Redstone, who is vice chair of both Viacom and CBS, and president and a director at National Amusements.

On Friday, Sumner Redstone removed both Dauman and Abrams from the trust and from the board of directors of National Amusements. He expressed concerns to them about Viacom's performance and received no response, according to a statement by Redstone's attorney, Michael Tu, on Saturday.

Viacom said in a statement its board has tried to meet with Sumner Redstone many times, adding that he was silent during a recent call about the company's strategy, including its planned sale of a stake in movie studio Paramount.

The Sumner M. Redstone National Amusements Inc Trust owns about 80 percent of Redstone's privately held National Amusements, which in turn owns 80 percent of the voting stock in both Viacom and CBS.

Besides Shari, trust members include Shari Redstone's son, lawyer Tyler Korff; David Andelman, another lawyer who is on the CBS board; Norman Jacobs, Sumner Redstone's divorce lawyer; and Leonard Lewin, an attorney who represented Redstone's first wife, Phyllis, in her divorce from Redstone.

After Sumner Redstone is incapacitated or dies, the trust would determine all matters that come to a shareholder vote at both companies, including potential mergers or acquisitions.

Viacom, like other media companies, has suffered from falling ratings at its cable networks as younger viewers migrate to online and mobile video.

Sumner Redstone is planning to name National Amusements Inc general counsel Tad Jankowski and family friend Jill Krutick to the seven-person trust, sources told Reuters on Sunday.

Viacom shares rose 3 percent, climbing above $40 a share on Monday. Over the past 12 months, the stock is down 40 percent, lagging the Standard & Poor's 500 Media Index, which is off 4.7 percent.