The suit filed Thursday in Delaware Chancery Court calls the decision unveiled Thursday by Sumner Redstone’s National Amusements an “invalid” exercise that runs counter to Redstone’s long-standing plan for the transfer of his estate after his death.
Frederic Salerno, Viacom’s lead independent director and one of those to be replaced, filed the lawsuit on behalf of the ousted directors. The suit asks the court to invalidate National Amusements’ five new board appointments and to bar Shari Redstone “from taking further wrongful actions under the direct or indirect authority of Sumner M. Redstone.”
The complaint casts the dispute as entirely a power play orchestrated by Shari Redstone at the expense of her father, who no longer has the mental capacity to make such significant decisions about the company. The elder Redstone has iron-clad control of Viacom and CBS Corp. through his ownership of nearly 80% of the voting interest in both companies.
“Shari now seeks to become Mr. Redstone’s puppet master, pulling his strings behind the scenes to improperly seize control of Viacom,” according to the complaint. “In doing so, Shari is attempting to use her father’s control to dismantle his own estate plan to serve her personal interests. Her attempt to do so, however, is based on exercising undue influence over her defenseless father and/or manipulating him to purportedly exercise authority when he was not mentally competent to have done so.”
Moreover, the suit accuses Shari Redstone of breaching her fiduciary duty as a director of Viacom by pursuing her agenda at the expense of shareholders.
“These actions have affirmatively harmed the public stockholders, who collectively hold an approximate 90% equity interest in Viacom,” the complaint states. “This is precisely the type of harm Mr. Redstone, through his longstanding estate plan, sought to avoid.”
A rep for Shari Redstone did not immediately respond to a request for comment.