Redstone's son sues family-run firm
Brent Redstone, 55-year-old son of media mogul Sumner Redstone, wants to dissolve company that controls Viacom, CBS.
NEW YORK (CNNMoney.com) - Brent Redstone, the 55-year old son of billionaire media mogul Sumner Redstone, wants to break up the family-owned company that controls both Viacom and CBS.
Brent Redstone filed a lawsuit last week in state court in Baltimore, which published reports say charges governance abuses and self-dealing by Sumner Redstone, 82, the chairman of Viacom (Research) and CBS (Research), and his daughter Shari Redstone, 51, who is vice chairman of both media conglomerates.
The reports say that Brent Redstone wants the court to dissolve National Amusements Inc., the privately-held company through which the Redstone family owns almost three-quarters of the two media companies, as well as stakes in video game maker Midway Games (Research), slot machine maker WMS Industries (Research) and a chain of movie theaters.
The Wall Street Journal reports that Brent Redstone owns one-sixth of National Amusements but is restricted by a shareholder agreement from selling it except for back to his family at book value, which would be a fraction of its market value.
He wants National Amusements dissolved in order to gain control of his stake. Published reports say the lawsuit values National Amusement assets at $8 billion.
The Journal reports the suit charges that National Amusements failed to provide Brent Redstone, a member of the family company's board, with adequate and timely information on key transactions, including last year's split of Viacom into two companies and a $425 million loan to Sumner Redstone. It also alleges that the company tried to persuade the younger Redstone to approve minutes for meetings that never took place.
"It's not our goal to litigate this in the press," Mark Wawro, an attorney with Brent Redstone's law firm, Susman Godfrey LLP of Houston, told the Journal. "It's unfortunate that this has come to pass."
National Amusements, of which Sumner Redstone is chairman and CEO and Shari Redstone is president, issued a statement Tuesday attacking Brent Redstone's suit.
"It is unfortunate that Brent Redstone is abusing the court system in an attempt to extract a financial settlement in a family dispute," the statement said. "His allegations are completely unfounded and NAI will defend itself vigorously against this meritless lawsuit."
The Times reports that Brent Redstone and his sister both own a one-sixth share of National Amusements, while Sumner Redstone owns the remaining two-thirds.
It reports that the lawsuit contends Sumner Redstone had a falling-out with his son when the elder Redstone asked both children to give up their voting stakes in National Amusements during divorce proceedings in an attempt to assure he would retain control of the company.
The Times reports that the suit says Brent Redstone refused while Shari agreed, and in exchange her father gave her a revocable trust agreement that subsequently favored her, while retaliating against her brother.
The Journal reports that while the suit is unlikely to shake Sumner Redstone's control of Viacom and CBS, it may also complicate his plan to shift control of his media empire to Shari Redstone after he dies.
For a look at a similar clash between media mogul Rupert Murdoch and his son Lachlan Murdoch, click here.