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Sumner Redstone Fight: Philippe Dauman Slams Shari Redstone as Hearing Approaches

UPDATED: Shari Redstone’s role in her father’s businesses was designed to be “ceremonial” and “temporary,” according to the latest legal filing from Viacom chairman-CEO Philippe Dauman in the battle over his removal from the boards of Sumner Redstone’s National Amusements and the family trust.

The filing by Dauman is in preparation for Thursday’s hearing in Massachusetts Probate Court on Sumner Redstone’s motion to dismiss the suit filed by Dauman last month after he and another longtime Redstone confidant, attorney George Abrams, were ousted from the two boards.

Dauman and Abrams argue that the ailing 93-year-old mogul is being manipulated by his daughter to fulfill her goal of taking the reins of his $40 billion media empire. The filing asserts that Sumner Redstone has been explicit in his desire that Shari Redstone not take control of the management of Viacom or CBS after his death.

Her role in the companies — she serves as vice chair and a board member of both companies — was dictated by her mother, Phyllis, as per the terms of her 2002 divorce from Sumner Redstone. But Shari’s role was seen by her father as “ceremonial” and “temporary,” according to the filing.

The filing asserts that the trust, which will inherit Sumner Redstone’s shares in Viacom and CBS after his death, was structured to ensure that independent (or what the trust calls “disinterested”) trustees would be in control as long as Sumner, Phyllis, Shari and her brother, Brent, were alive.

According to the complaint, the trustee board is to be composed of four disinterested members and three family members — to ensure that the management of the companies was handled by independent executives. After the death of Shari and Brent Redstone, the board ratio will reverse to four family members and three disinterested members, according to the complaint.

“Mr. Redstone assured that independent trustees would control the trust during his children’s lifetime and that his children, in particular his daughter Shari, would not ever have control of the shares of the trust and could not ever seize control of Mr. Redstone’s public companies,” the filing states.

Redstone responded to the move on Monday with a statement from his strategy team: “Fred Salerno, Philippe Dauman, and George Abrams have repeatedly told the courts that the Viacom board is being blocked from meeting with Sumner, leaving them no choice but to pursue claims. That fiction has been shattered.When Sumner agreed to make his wishes clear in a face-to-face meeting with independent director Charles Phillips, the Viacom board would not let that happen. Philippe and his allies long ago stopped caring about what Sumner wants, or even the shareholders generally. It’s all about self-preservation.” Fred Salerno is Viacom’s lead independent director.

Viacom responded to Redstone’s comment with a statement of its own later on Monday: “The statement from Mr. Redstone’s ‘strategy team’ is both inaccurate and incomplete. The only fiction that has been shattered is that a meeting would be permitted that could actually assess Mr. Redstone’s capacity and undue influence. The one fact not in question is that an examination to assess Mr. Redstone’s capacity and undue influence needs to happen. We will have no further comment until we hear from the courts.”

Dauman and Abrams reiterate their belief that Sumner Redstone is too ill and incapacitated to have made such a significant decision without “undue” influence from Shari. The complaint cites a meeting between Dauman and Sumner Redstone in early March where the latter was “almost totally non-responsive, and could not meaningfully communicate at all.”

The complaint details the many moves in the past month by the Sumner and Shari Redstone camp to position Viacom for a management overhaul. Those include the June 6 revision of the company’s bylaws to prevent Dauman from pursuing the sale of a stake in Paramount Pictures to the June 16 move to replace five Viacom board members, including Dauman. That sparked a separate legal proceeding now unfolding in Delaware Chancery Court, although the judge in that case is deferring discovery to the Massachusetts proceeding, in part because of Sumner Redstone’s frail condition.

All of the recent moves taken under Sumner Redstone’s name are part of a campaign by Shari “to take over the very companies her father long denied her,” the complaint states.

In a separate declaration, Abrams notes that his relationship with Sumner Redstone dates back more than 50 years and that Abrams even represented the mogul’s father, Michael. The declaration dated June 25 closes by expressing his hope that the legal warring can be resolved quickly “in the interest of shareholders and employees of Viacom and CBS and in the interest of the Redstone family.”

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