Shareholders have dropped their lawsuit against CBS and Viacom for allowing Sumner Redstone to remain as chairman of the companies when he was reportedly mentally unfit for the task, the lawyer handling the case said.
The equity holders still intend to seek damages from the companies, their boards of directors or Redstone and his future estate, attorney Richard Greenfield said Thursday. He said that some or all of Redstone’s compensation — which he pegged at $28 million a year in 2013 and 2014, and $4 million in 2015 — should be returned to those who held stock in CBS and Viacom.
Greenfield, who filed the original complaint in January, said he would continue to pursue the money via another avenue, which he declined to specify.
The shift in the shareholders’ strategy comes as lawyers for Redstone’s longtime companion, Manuela Herzer, prepare to take depositions of the magnate’s daughter, Shari Redstone, and Viacom CEO Philippe Dauman. Both will be questioned next week by lawyers for Redstone and Herzer, who claims she was improperly removed as the former chairman’s health care agent.
“He did not provide any services for either of the companies for a certain time,” said Greenfield. “All of that money should be paid back.”
The original lawsuit alleged the heads of the two companies “put their personal loyalty to Mr. Redstone (in particular, and secondarily to [Shari] Redstone) well ahead of their loyalty and respective fiduciary duties they owe and owed to Viacom and/or CBS and their respective shareholders.”
The suit followed Herzer’s lawsuit in a Los Angeles probate court, which is set for trial in May. Redstone’s one-time girlfriend, who later lived in his Beverly Park mansion and helped oversee the 92-year-old’s care, said that people around the magnate forced her out of the home in order to take control of his life and business affairs.
Lawyers for Redstone said he was of sound mind last October when he decided to move Herzer out. He also removed her from his estate — which previously would have given her $50 million and his $20 million mansion. Redstone’s lawyers have accused Herzer of fighting for control of health care decisions not out of care for the billionaire, but only to reinstate the earlier estate arrangement.
The news about the shareholders dropping their lawsuit was first reported by the Hollywood Reporter.