Posted Jan 19, 2016 04:35 pm CST
Board members of CBS Corp. and Viacom Inc. should have put their duty to the companies and shareholders ahead of loyalty to 92-year-old chairman and controlling shareholder Sumner Redstone.
But they didn’t, contends a shareholder derivative lawsuit filed Tuesday in the Delaware Court of Chancery. It says billionaire Sumner Redstone is “physically and mentally incapacitated” and questions why he was paid some $169 million from 2012 to 2014, according to the Los Angeles Times (sub. req.) and Variety.
Asserting causes of action for unjust enrichment and breach of fiduciary duty and the duty of loyalty, the action seeks a court order requiring the companies’ boards to recognize that Redstone is incapacitated and terminate his compensation. It also seeks the repayment of tens of millions of dollars.
A spokesman for Viacom described the litigation as “without merit.”
Redstone has not appeared publicly at corporate events for 18 months and struggles to speak comprehensibly, the Times says. The lawsuit alleges CBS and Viacom officials have concealed his failing health and have not established a succession plan. However, a private physician for Redstone has testified in another matter that he is competent.
Reuters: “Two medical colleagues duel over Sumner Redstone’s mental fitness”