Sumner Redstone’s expert on aging says the 92-year-old who is battling to control his media empire “retains the mental capacity to make the decisions” he recently made to remove Viacom CEO Phillippe Dauman from key positions overseeing Redstone’s assets.
Dauman, who has served Redstone for years, has filed a suit in Massachusetts claiming that Redstone was not fit when he dismissed Dauman as a director of National Amusements and as a trustee of the trust that will control National Amusements when Redstone dies. Also removed as a trustee and director was George Abram, a long-time Viacom director.
National Amusements is privately owned by the Redstone’s and holds 80% voting interests in Viacom and CBS. Redstone stepped down as executive chairman of both companies and Viacom eliminated the compensation he’d been getting paid.
A spokesman for Redstone released a statement late Thursday saying that Redstone was examined at his home on May 20 and May 24 by Dr. James E. Spar a geriatric psychiatrist and professor at the David Geffen School of Medicine at UCLA.
“Based upon the evaluations conducted on May 20 and May 24, 2016, I believe that Mr. Redstone retains the legal mental capacity to make the decisions he described to me on those dates regarding the National Amusements Board of Directors and the Trustees of the National Amusements Trust,” Dr. Spar said, according to the statement.
“ Specifically, with respect to those decisions, Mr. Redstone clearly communicated to me that he understood and appreciated the rights, duties, and responsibilities affected by those decisions; the probable consequences for himself and the other persons affected by the decisions, and the significant risks, benefits, and reasonable alternatives involved in those decisions. Moreover, the changes he made seemed appropriate to me in light of recent events, and seemed to reflect his own, authentic wishes and preferences, and not the influence of any of the individuals in his environment,” Dr. Spar said.
Lawyers for Dauman and Abrams said the statement didn't prove that Redstone has capacity to make decision or that he wasn't acting under undue influennce. The laywers' full statement is below.
Dr. Spar was also involved in a suit challenging Redstone's competency by his former live-in companion Manuela Herzer. In that case, a judge ruled that Redstone did want Herzer removed as the person who would make health care decisions for him when he become incapacitated
In the statement, specific areas discussed by Dr. Spar with Redstone are described.
During the May 20 meeting, “I asked Mr. Redstone why he was removing Mr. Dauman as Trustee and Director, and he said, ‘He’s done a bad job running Viacom.’ I asked the same question about Mr. Abrams, and Mr. Redstone said, ‘He’s not listening to me,’” Spar said.
And at the May 24 meeting, “several times during this discussion Mr. Redstone reminded me that he makes all the decisions about Viacom and CBS . . .Mr. Redstone emphatically indicated that he no longer trusts Mr. Dauman or Mr. Abrams,” Dr. Spar said.
“I asked Mr. Redstone to explain his belief that Mr. Dauman had ‘done a bad job running Viacom.’ He indicated that he had been following the value of Viacom stock over the past year, and knew that it had declined significantly. He spontaneously added that the value of the stock had gone up since his decisions about Mr. Dauman and Mr. Abrams had become public,” Dr. Spar said. “Mr. Redstone was particularly displeased with Mr. Dauman’s decision (supported by Mr. Abrams) to sell part of Paramount Pictures (a company which Mr. Redstone acknowledged is “his baby”), and several times expressed his emphatic disapproval of that move. Mr. Redstone said that he had clearly expressed his feelings about the Paramount sale to both Mr. Dauman and Mr. Abrams, but in his view they ignored his wishes.”
Dr. Spar administered a Mini-Mental State Exam, which tests cognitive functions, and found that Redsone had a “mild degree” of cognitive impairment, given his age and advanced education.”
Here is the response from Les Fagen of Paul Weiss Rifkind Wharton and Garrison, counsel to Philippe Dauman and George Abrams
“Once again Mr. Redstone is heard only through carefully crafted remarks distributed by his advisors. This evaluation was conducted by a paid medical consultant and does not answer the question of whether Sumner Redstone had sufficient capacity to make complex decisions impacting the governance of billion dollar publicly-held corporations, nor does it acknowledge that undue influence was exercised to manipulate his views. It is clear more than ever that a complete and objective examination of Mr. Redstone will be required to answer these important questions. As for Dr. Spar's report on Paramount, evidently neither the Dr. nor his patient understand that as yet there is no Paramount deal to oppose. Such a deal if it matures will be the subject of evaluation and review by all Board members.”
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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