Whoa: Redstone tosses Viacom board and CEO

Redstone‚à “ôs family theater company said Thursday, June 16, 2016, it has replaced five directors from Viacom‚à “ôs 11-member board, including CEO Philippe Dauman, and filed court papers in DE to defend its actions”.

Dauman and Abrams have already been removed from the National Amusements board of trustees and Redstone family trust, which will ultimately decide Viacom’s future after the 93-year-old Sumner Redstone retires or passes away.

Viacom’s Lead Independent Director of the Board of Directors Frederic V. Salerno filed a lawsuit in DE to block Redstone’s move, accusing Shari of acting on her father’s behalf in making an “invalid” move.

Messrs. Dauman and Abrams have challenged those moves in a MA court, arguing that Mr. Redstone lacks the mental capacity to make these decisions and is under “undue” influence from his daughter, Shari Redstone, Viacom’s vice chairman.

Ms Redstone said at the time that it was “absurd” to say she controlled her father.

Viacom’s B-class shares jumped 6.8 percent to $45.05 at the close in New York Thursday.

Dauman has argued in court papers that Redstone was being manipulated by Shari Redstone, his daughter.

In a regulatory filing on Friday, Viacom said it would reimburse Dauman for his legal expenses in his court battles with Redstone. Dauman sued after Redstone moved to remove him from the National Amusements board and the trust that will control it after Redstone dies. Redstone has sent an email saying he no longer trusts Dauman, a long-time friend and business associate. Dauman oversees MTV, VH1, Comedy Central, Nickelodeon, movie studio Paramount Pictures and a host of other valuable properties.

The new board members include Kenneth Lerer, who co-founded The Huffington Post and is chairman of BuzzFeed. Dauman, the third highest-paid CEO in America a year ago, has been criticized by analysts and investors alike for failing to keep up with changes wrought by the internet on Viacom’s TV networks like Comedy Central, MTV and Nickelodeon. At a hearing in Canton, Mass., earlier this month, an attorney for Redstone said that his client asked Dauman personally to not sell the Paramount stake.

At a subsequent board meeting, Redstone did not speak up when the board discussed Paramount, Salerno said. Wikipedia lists Dauman as the former chairman and chief executive officer of Viacom. That’s essentially corporate speak for “You can’t fire me, I quit!” But the new board will “evaluate the current management team and take whatever steps it deems appropriate to ensure that Viacom has in place strong, independent and effective leadership”, according to a statement released by National Amusements.

Redstone stepped down as executive chairman of the CBS board of directors in February, as The Two-Way reported.