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Judge Refuses to Dismiss Redstone Case

A Massachusetts judge denied mogul Sumner Redstone’s motion to dismiss a suit brought against him by Viacom CEO Philippe Dauman.

The judge allowed Dauman’s lawyers access to the medical record of the 93-year-old Redstone, who is the media company’s controlling shareholder, but stopped short of ordering an immediate examination of Redstone by Dauman’s doctors, as Dauman had requested. A trial could take place in October.

The case is part of the battle for control of Viacom pitting Dauman and other Viacom directors versus Redstone and his daughter Shari Redstone.

Redstone moved to remove Dauman from the board of National Amusements, the Redstone family holding company, and from the trust that will control the Redstone assets when he dies or is declared incompetent. Redstone separately also moved to have Dauman and other directors removed from the board of Viacom.

Dauman and other Viacom directors sued to have the moves declared invalid. They charge that Redstone is no longer competent and is under the undue influence of his daughter.

Probate Judge George Phelan ruled that the dispute must be decided under Massachusetts law by a Massachusetts court.  He also said that a conclusion that undue influence could turn out to be “plausible” because the action taken by Redstone “is not logical and not natural, given the subjective context of the Redstone family dynamic, as alleged.”

The judge added that his is not in a position to rule on Redstone’s move to remove Dauman and other from the board of Viacom.

The judge also put off ruling on Dauman’s request that Shari Redstone be enjoined from taking “further wrongful actions” with regard to the trust and its assets.

Mike Lawrence, a spokesman for Sumner Redstone said that “when deciding whether to dismiss this complaint, the court was required by law to assume all of Mr. Dauman and [National Amusements director George]. Abrams’ allegations as true, including those which we will prove false as this case progresses.  We look forward to exposing this specious and malicious attack on the Redstones, and we believe that Mr. Dauman and Mr. Abrams will be no more successful at thwarting Sumner’s wishes in Massachusetts than Manuela Herzer was in California.”

Lawrence added that “we thank the court for protecting Sumner Redstone’s privacy and dignity.  Mr. Redstone’s capacity has repeatedly been confirmed by one of California’s leading geriatric psychiatrists, including on the very day that he removed Mr. Dauman and Mr. Abrams from his Trust and from the board of National Amusements.  Moreover, because a majority of trustees ratified the removal of Mr. Dauman and Mr. Abrams, their dismissals will stand regardless of what Mr. Dauman and Mr. Abrams’s paid experts might say about Sumner’s capacity or alleged undue influence.  This was the right decision.”

A spokesman provided a statement from Dauman and Abrams:

“We are grateful that Judge Phelan’s thoughtful opinion removes yet another of defendants’ efforts to block an investigation into the merits and, in particular, an independent determination of Mr. Redstone’s capacity and the question of undue influence.  Judge Phelan acknowledges the seriousness of the allegations and the need for a speedy trial in Massachusetts.  We also appreciate that he is allowing prompt access to medical records and immediate discovery.  We welcome the opportunity to prove the facts at trial," the statement said.

A hearing in a suit brought by Viacom directors against Redstone is scheduled for tomorrow in Delaware.