UPDATED with comment from Sumner Redstone’s spokesman.
The battle for control of Viacom could soon shift to a Delaware court as nine of Viacom’s 11 board members are preparing a legal challenge in anticipation of being swept out by controlling shareholder Sumner Redstone, possibly as early as today.
Reports about the growing likelihood of what would be an extraordinary development for a publicly held company surfaced the same day that Redstone marks his 93rd birthday.
A spokesman for Redstone was noncommittal about the mogul’s intentions and would only say: “Sumner Redstone will make every decision with the same deliberation and consideration with which he removed Philippe Dauman and George Abrams as trustees, based on the best interests of shareholders.”
A rep for Viacom declined to comment on a report Friday morning by CNBC’s David Faber that board members, other than controlling shareholders Sumner Redstone and Shari Redstone, are bracing for the news that they are out as directors of the media giant.
That group would include Viacom chairman-CEO Dauman. Dauman is already suing Redstone for his removal last week from the board of Redstone holding company National Amusements and the trust that will inherit Redstone’s controlling stakes in Viacom and CBS Corp. after his death.
The preferred shares that give Sumner Redstone iron-clad control of Viacom allow him broad discretion in replacing board members at any time, according to Viacom’s bylaws. But the non-Redstone directors are prepared to challenge that move in court in Delaware, where the company is incorporated.
The removal of the board en masse would mark another extraordinary development in the war between the Redstone clan and Dauman. The animosity boiled over into public view last week when Dauman and fellow Viacom board member George Abrams were removed from the boards of National Amusements and the Redstone trust. Dauman has since accused Shari Redstone of manipulating her father, who has been in failing health for months.
Dauman’s removal as a board member would add to the sense of confusion around the management of Viacom. Employees of the parent company of Paramount Pictures, MTV Networks and other cable assets have been dismayed and distracted by the shocking turn of events in the past year and particularly the past two weeks.
