UPDATED: Two of Sumner Redstone’s former long-time female companions extracted $150 million in cash, jewelry, designer clothing, and real estate by emotionally abusing and controlling the billionaire, Redstone charged Tuesday in a lawsuit seeking to recover his assets.
Redstone’s action in Los Angeles Superior Court charges Manuela Herzer and Sydney Holland with an elaborate scheme to isolate the Viacom and CBS Corp. chairman emeritus from family and close friends, in order to drain his bank accounts and enhance their position in his estate plan.
Herzer and Holland allegedly took so much from Redstone — including matching $45 million checks in a single day in 2014 — that he was pushed into debt by the gifts and the enormous taxes that went with them. The lawsuit accuses the duo with elder abuse, fraud, breach of fiduciary duty, and infliction of emotional distress.
As part of their scheme to separate the Viacom and CBS controlling shareholder from his wealth, the two women cut Redstone off from his daughter, granddaughter, and other relatives, the suit alleges. It claims they told the frail magnate that “they were the only ones who loved him and the only ones who would protect him, and that if they left, he would die alone.” The threats were so powerful that the once vigorous magnate was often reduced to tears, the suit says.
Holland issued a statement late Tuesday afternoon saying that it made no sense to suggest that Redstone could not handle his own affairs, since the businessman had recently been able to orchestrate the departure of Philippe Dauman as CEO of Viacom.
“The fact is, Mr. Redstone’s attorneys and doctors vetted and approved all payments to Ms. Holland,” her statement said. She added that she wanted to stay out of the legal contest but would now have to respond, her defense alleging that Redstone’s daughter, Shari, has manipulated him to oppose his two former companions. “It is sad that Ms. Redstone is using her vendetta against Ms. Holland to destroy her father’s reputation and legacy as an entertainment industry visionary,” Holland said.
Herzer’s attorney, Ronald Richards, said in a statement that the suit “has no merit whatsoever” and turned blame for the dispute on Redstone’s daughter, Shari. Richards added: “My client has a 20-year close personal relationship with Mr. Redstone that can’t be erased by the filing of civil complaint that lists incomplete, misleading, and false allegations.”
Richards said Redstone is trying to distract from Herzer’s legitimate claims that she was improperly disinherited by the billionaire. He added that Redstone “had many checks and balances between attorneys, doctors, and accounting staff. These safeguards completely dismantle allegations that someone could manipulate him to gift away money.”
While the lawsuit covers some ground already familiar to followers of the Redstone saga, it provides new levels of detail of the alleged scheme by Herzer, 53, and Holland, 45, and how it unraveled. The lawsuit describes the older woman as “the brains of the operation, who Redstone had known for years and trusted and confided in; and Holland, the younger beauty who had Redstone wrapped around her finger.”
The two women once lived at Redstone’s Beverly Park estate, but were thrown out by the billionaire within six weeks of each other last year. Redstone learned that Holland had cheated on him and found out from members of his household staff that Herzer had blocked him from contact with family and other outsiders, the suit says. It was Herzer’s attempt to push her way back into Redstone’s life last year that helped alert him to his isolation and to move him to regain control of his life and affairs, his lawyers have said.
The fallout from the domestic dispute led Redstone to toss two long-time confidants — Viacom CEO Philippe Dauman and Viacom board member George Abrams — off the trust that will eventually determine control of his shares in Viacom and CBS Corp. Dauman subsequently left his post as CEO.
The lawsuit says Herzer and Holland “terminated his doctors, nurses, household staff, and longtime advisers and brought in handpicked replacements,” adding: “They decided who came and went from the residence. They spoke for Redstone when he lost his ability to vocalize.” The duo abused these positions of trust when the magnate, now 93, was most vulnerable — restricted mostly to home, forced to eat through a feeding tube, and limited by a severe speech impediment.
“Herzer and Holland took far more than Redstone’s money,” the suit charges. “They took give of the last year’s of his life. They took time away from his children, grandchildren and great-grandchildren. They took his pride and dignity.”
Redstone’s action portrays Herzer and Holland as less than model citizens even before their fraught relationship with the businessman. It says one boyfriend once obtained a restraining order against Herzer “based on allegations that she had physically attacked him in front of their daughter.” It depicts Holland as a failed businesswoman, who once picked clean the apartment of a boyfriend who died of a cocaine overdose — after allegedly clearing evidence of drug use from the home.
Herzer had once been Redstone’s lover and Holland was his current flame, when they found themselves living together in his sprawling home. Instead of turning against each other, they saw how they could join together to cut off other rivals, the suit says.
The scheme took “far from conventional” turns, the suit contends, such as Holland picking other women who were allowed to “satisfy Redstone’s prurient desires.” Though others were allowed contact with the billionaire, never enough to allow his bond to Holland and Herzer to be weakened, the suit says.
Some long-time household staff members, deemed insufficiently loyal to the two women, were summarily dismissed, while remaining staff members were subjected to polygraph tests, the suit claims. Staffers were instructed not to let Redstone’s relatives visit the mansion. Their calls were allegedly turned away, the suit says.
The action paints a picture of the two women as particularly avaricious: Holland would, at times, have nurses administer Ativan to Redstone to sedate him. At other times she would threaten to leave him, causing the nonagenarian to burst into tears. Both Holland and Herzer would then spend with abandon — the former logging bills of $63,000 at Mario Jewelers and $58,000 at Saks Fifth Avenue, for example, while Herzer ran up a $129,000 tab at Barneys and spend $82,000 more at Hermes.
The two then worked a scheme to dislodge larger sums that Redstone had tied up in stock options and stock, the suit claims. That plan succeeded on May 19, 2014, when they persuaded the magnate to sell options and other sotck worth a total of about $100 million. “Later that same day, Redstone made two transfers, $45 million each,” the suit says, “to the personal bank accounts of Holland and Herzer.”
The largess had a double whammy on Redstone because the gift and generation-skipping taxes amounted to another $90 million, money which he had to borrow from his National Amusements holding company, the suit says.
The two women also set about enhancing their positions in his estate plan, the suit says — rehearsing with Redstone what he had to say to his family planning lawyer and berating him when he strayed off message, the lawsuit contends. “By mid-June 2014, an ‘amended and restated’ estate plan was in place,” the lawsuit says, “and Holland and Herzer were firmly in control.”
Fleeting contacts with his daughter, Shari, and grandchildren began to persuade Redstone that something was amiss. Later in 2014, during a visit to Cedars Sinai Medical Center, the billionaire allegedly told Holland, “I want my $45 million back.” She was able to put him off for a time, then told nurses, “We have to put him to sleep,” the suit says.
Herzer’s lawyer rejected that and other details in the lawsuit. In his rebuttal statement, Richards said: “All of the gifts Mr. Redstone made to my client and to Sydney Holland were made with his full knowledge and blessing.” He said James Spar, a UCLA geriatric psychiatrist, had verified that Redstone understood the ramifications of his actions.
Herzer alleges that it was Shari Redstone who manipulated the household staff and turned the magnate against Herzer and Holland. “This manipulation continues in the form of this frivolous lawsuit,” Richards said. “Mr. Redstone continues to be victimized by his daughter and her surrogates. Hopefully, in defense of this lawsuit, his true state of mind will finally come to light.”
The Sumner Redstone lawsuit alleges that Herzer and Holland’s scheme began to unravel in September of 2014. After his hospitalization, Shari Redstone and her children were able to visit Redstone. One of his nurses, Joseph Octaviano, laid out in detail the system of control that the two women had imposed, the lawsuit says. Even as family members visited that month, Holland phoned the Beverly Park home and demanded Redstone throw his kin out, the lawsuit says. Redstone began sobbing and told Shari and a grandson he loved them but they had to leave.
The suit includes several pages of emails from Octaviano that depict a continuing pattern of manipulation and deceit by the two women — including cajoling Redstone into signing business documents to their benefit.
In October, Redstone’s staff had allegedly “been forced to tell one lie too many.” They finally told Redstone how Herzer had been deceiving him, turning the billionaire “apoplectic,” the suit says. He soon tossed Herzer out of the home, six weeks after he had banished Holland.