Shareholder suit targets Viacom, CBS payments to Redstone

The lawsuit alleges CBS and Viacom officials have concealed his failing health and have not established a succession plan.

Viacom Inc. and CBS Corp. board members are being sued by an investor who contends the boards of the two media companies are protecting the interests of mogul Sumner Redstone at the expense of corporate shareholders.

Viacom says the shareholder suit is without merit and it would fight it vigorously; with regard to Jackson’s 99-page presentation, it says it’s focused on long-term shareholder value. The suit says CBS paid him $22 million while Viacom awarded $24 million, ostensibly for his work.

The new charges build on ones in a separate suit by Sumner Redstone’s former companion Manuela Herzer who was replaced as his health care agent in October.

Redstone signed a form making Herzer his health care proxy in September, but six weeks later, he rescinded that and made Dauman his health care proxy instead. However, a private physician for Redstone has testified in another matter that he is competent.

But they didn’t, contends a shareholder derivative lawsuit filed Tuesday in the Delaware Court of Chancery.

Redstone’s lawyers opposed Herzer’s move and his doctors filed statements saying he was still capable of making those decisions.

A spokesman for Herzer’s lawyer said, “Mr. Dauman has been ordered by the Los Angeles probate court to give sworn testimony in Mr. Redstone’s competency proceeding”. “Mr. Dauman filed a declaration claiming that his boss continued to be active in managing Viacom and Mr. Redstone “spoke” about complex business issues”.