Viacom Gears Up For Fight To Keep Board From Redstone

NEW YORK (Reuters) – Viacom Inc’s <> 6 independent directors swore on Monday to eliminate any effort to oust them from the board, stating they discovered “mysterious” the assertion that managing investor Sumner Redstone was psychologically proficient and acted of his own free choice.

In a letter to investors, Lead Independent Director Fred Salerno stated the directors would lawfully object to any quote to eliminate them, the most recent salvo in a bitter and progressively public fight for control of Viacom at a time when the United States media business has to concentrate on turning its company around.

The letter came 3 days after a statement from Redstone, released by his representative, that stated the 93-year-old media magnate was thinking about ousting Viacom Chief Executive Philippe Dauman and the board of directors.

Salerno made no reference of Dauman in his letter, however stated the independent directors have actually attempted to satisfy in person with Redstone for numerous weeks and have actually been turned away.

Writing on behalf of 6 of Viacom’s 11 board members, Salerno stated, “we feel the duty to challenge in court exactly what we truthfully think would be lawfully flawed eliminations.”

“That is specifically so since the defect we see would be the mysterious assertion that Sumner was acting of his own free choice and with the mental proficiency to do so,” he composed.

A spokesperson for Redstone decreased to comment.

Redstone holds 80 percent of the ballot shares in Viacom and CBS Corp <>. Previously this month, he eliminated Dauman and Viacom board member George Abrams from the seven-person trust that will manage the shares after Redstone exits.

Dauman, 62, has actually submitted a legal difficulty to that relocation, saying that Redstone was being controlled by his child, Shari. She has actually called that accusation “ridiculous” and spokened her daddy made his own choices.

Solerno’s letter called a replacement of the independent directors “totally irregular with Sumner’s life time dedication to an independent Board” and “similarly irregular with his stated judgment for several years that his child, Shari, must not manage Viacom or his other services.”

A spokesperson for Shari Redstone decreased to comment.

UNHAPPY PERFORMANCE

Shares of Viacom have actually fallen more than 50 percent in the previous 2 years as its cable television networks, consisting of MTV and Nickelodeon, experienced falling scores since more youthful audiences were moving online and to mobile video. Viacom’s U.S. marketing profits has actually decreased for 7 straight quarters.

Salerno spokened the directors were not delighted with Viacom’s present efficiency, and they were “really focused” on enhancing it and on “the requirement for management to drive it.”

He included that they plan to continue with strategies to “check out tactical choices that may consist of a minority financial investment in Paramount,” Viacom’s motion picture studio.

Questions about Redstone’s health have actually swirled considering that among his previous sweethearts, Manuela Herzer, submitted a claim in 2014 saying that he was not psychologically proficient to eliminate her from his advance health care instruction.

The case, which asserted that Redstone was “a living ghost,” was dismissed previously this month. The magnate had actually had a hard time to speak when questioned by lawyers, however he was clear about desiring Herzer from his life and putting his child in charge of health care choices if he might not make them.

Since Redstone eliminated Dauman from the trust on May 20, Viacom shares have actually increased more than 13 percent, a relocation that some financiers viewed as the initial step in a modification in management that might ultimately result in a sale of the media business.

A hearing on whether Dauman’s case must be sped up is arranged in Massachusetts on June 7, after he submitted a petition to have the trial date went up.

(Reporting by Chuck Mikolajczak and Jessica Toonkel; Editing by Tiffany Wu)

Read more: http://www.huffingtonpost.com/2016/05/30/viacom-redstone_n_10214740.html