Viacom Inc. chairman Sumner Redstone’s private feud with his son, Brent Redstone, became public when the latter filed a lawsuit in Baltimore City Circuit Court Feb. 6, asking for the breakup of one of his father’s biggest holdings.
Brent Redstone, who serves on the board of National Amusements Inc. -- the Boston-based movie-theater chain and the vehicle that holds his father’s controlling interests in Viacom and CBS Corp. -- accused his father and sister, Shari Redstone, of misappropriating funds and freezing him out on important company matters.
The younger Redstone is calling for a breakup of NAI -- which, he estimated, is worth about $8 billion -- giving him a one-sixth share of the proceeds.
Even of the suit is successful, it is unlikely that it will affect Sumner Redstone’s holdings -- he controls two-thirds of NAI and has 71% voting control of Viacom and CBS.
In the suit, Brent Redstone charged that his father failed to hold necessary board meetings; to provide him with basic information on the financial and corporate affairs of NAI; and to appoint him to any “significant or well-compensated position at National Amusements.”
Instead, he showed favoritism to Shari Redstone, who was named president of NAI and who is likely to take her father’s role at Viacom and CBS following his retirement or death.
Brent Redstone also alleged that his father had NAI pay off a $425 million personal loan and that the company gave Shari Redstone’s ex-husband, Ira Korff, a former NAI employee, a severance package of millions of dollars “as a payoff in exchange for considerations in the divorce that were personal to Shari Redstone.”
And Brent Redstone alleged that Shari and Sumner Redstone have funneled millions of dollars from National Theater Corp. (the movie-theater chain that is Brent Redstone’s chief source of income) to themselves.
The lawsuit culminates what has been at times a contentious relationship between father and son, which, according to the suit, soured shortly after Sumner Redstone divorced his wife and Brent’s mother, Phyllis, in 1999.
Fearing that a divorce settlement could reduce his control of NAI, the suit alleged that Sumner Redstone asked his children to sign an irrevocable trust, which would surrender their voting rights. When Brent Redstone refused to sign the document, Sumner then offered a revocable voting trust to Shari Redstone, which she signed.
“Subsequently, as a result, Sumner Redstone has treated his daughter with extreme favoritism and has retaliated against and disfavorably treated plaintiff, his son,” the suit claimed.
NAI dismissed Brent Redstone’s allegations.
“It is unfortunate that Brent Redstone is abusing the court system in an attempt to extract a financial settlement in a family dispute,” NAI said in a statement. “His allegations are completely unfounded and NAI will defend itself vigorously against this meritless lawsuit."
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