Money, betrayal at center of suit targeting mogul
It’s a Hollywood tale for the ages, colored by power struggles, family rifts, sex and a vast fortune.
Only this drama won’t be playing out on the big screen but in a downtown Los Angeles courtroom.
Barring an 11th-hour settlement, a high-profile trial to determine whether Sumner Redstone is mentally competent begins Friday, providing an up-close look at the life of the 92-year-old billionaire who controls such prominent media outlets as the CBS network, MTV, Nickelodeon, Comedy Central, Showtime and the Paramount Pictures movie studio.
Redstone, in court papers filed Thursday, acknowledged lavishing $150 million in gifts — several homes, exquisite clothing and Paris getaways — on two female companions over a five-year period that abruptly ended last fall when the mogul kicked the two women, one after the other, out of his Beverly Park mansion.
One of his former companions, Manuela Herzer, filed the lawsuit in November seeking to reclaim her authority over Redstone’s healthcare should he become incapacitated. Last month, lawyers for the two sides negotiated a possible
deal that would have paid Herzer $30 million to drop her lawsuit, but the deal unraveled.
The famously stubborn Redstone — who survived a deadly hotel fire in 1979 by clinging to a window ledge as flames seared his arms and legs — suffers from a severe speech impediment and will not be in court, instead appearing in a videotaped deposition Thursday.
But despite his infirmities, Redstone has rejected advice from some family members who urged him to settle the case, according to a person familiar with the circumstances who was not authorized to speak publicly. Redstone didn’t want to pay his former girlfriend a king’s ransom to go away, this person said.
In court papers, Herzer questioned Redstone’s mental capacity, contending he was not in his right mind when he decided to throw her out. Her court filings have also exposed confidential Redstone family business documents, personal slights and tensions between Redstone and his family members.
She also claimed that Redstone constantly demanded sex and was prone to crying spells.
Beyond those claims, the lawsuit also fueled questions about the future of the two media companies controlled by the Redstone family: CBS Corp. and Viacom Inc.
For Redstone, who has built a media empire valued at $42 billion, the salacious case probably will leave a lasting stain.
“Sumner Redstone, through vision and ability, has created an enormously important legacy,” said Raphael Amit, a Wharton Business School professor. “But what is so surprising is this lack of concern for the preservation of his legacy. When emotions kick in, rational thinking takes a back seat.”
In the court papers filed Thursday, Redstone claims that Holland and Herzer had collectively received $150 million from the mogul over five years. The court filing did not provide a full accounting of the gifts.
In late August of 2015, Redstone banished his former girlfriend, Sydney Holland, from his life after she confessed to having a yearlong affair with another man, according to the court documents. Then Redstone rekindled a relationship with a longtime friend, Terry Holbrook, sending her love notes and flowers and inviting her to his home.
Herzer, meanwhile, moved in full-time after Holland left and “became focused on keeping other women out of his life,” Redstone attorney Amy Koch wrote in Thursday’s court filing.
“She deceived him, he found out about it, and he threw her out of the house,” the filing said. Until that time, Redstone’s two ex-companions “exercised virtually unfettered authority of his finances.”
After Redstone evicted Herzer in October, he patched things up with his ex-wife Paula Fortunato, who has visited him regularly ever since, according to people familiar with Redstone’s affairs.
But the mogul found a determined adversary in Herzer, 51, whom he met at a dinner party and proposed marriage to 15 years ago when he was between wives. Herzer declined, but their friendship flourished after the marriage between Redstone and Fortunato ended.
Holland, in October, tried to deliver a letter to Redstone to apologize for her infidelity and profess her love to the billionaire but Herzer intercepted Holland’s letter and “typed up fake letters from Ms. Holland that were designed to infuriate Mr. Redstone,” Koch wrote. Herzer’s attorney denied the allegation.
During this time, Herzer went on extravagant spending sprees, according to his lawyers. Between Aug. 27 and Oct. 12, Herzer charged more than $200,000 to Redstone’s American Express card. Charges totaling “tens of thousands of dollars” more were put on Redstone’s City National Bank Visa card, court documents said. She asked the bank to deliver $40,000 in cash to Redstone’s home on Oct. 1.
“The next day, she executed a $5 million grant agreement with Mr. Redstone for the benefit of her foundation,” the filing said.
Redstone’s attorneys argued that Herzer didn’t seem too concerned about Redstone’s health as she was racking up credit card charges, which included $57,804 at Windsor Smith interior design shop; $3,744 at the tony Zimmermann clothes boutique; $7,308 at Barneys, $2,095 at Bergdorf Goodman and $400 for “skincare in Beverly Hills,” the court documents allege.
“Mr. Redstone was generous with a lot of people in his life, and she was one of them,” said Herzer’s attorney Pierce O’Donnell. “He called her the love of his life.”
The key decision was removing her as the person who would make healthcare decisions for Redstone should he become incapacitated. He also removed Herzer from his will. She had been in line to receive at least $50 million along with Redstone’s mansion overlooking Beverly Hills, according to the court documents.
Herzer contends that there was a conspiracy, orchestrated by Redstone’s daughter, Shari Redstone, and his nurses to squeeze Herzer from the picture.
“The trial will expose the tragic inconvenient truth that Sumner Redstone needs the court’s protection from those who have lied to and exploited him in his debilitated condition,” O’Donnell said.
Observers have questioned how a case this damaging to Redstone’s reputation could have gone this far without being quietly settled. Aside from Redstone’s reluctance to pay Herzer a multimillion-dollar settlement, other sticking points to a deal emerged, according to people close to Redstone’s camp. One was whether the mogul would agree to cover Herzer’s legal costs if she was sued by any members of his family, they said, and another was a demand that Redstone fire several household staff members whom Herzer felt had doublecrossed her.
O’Donnell said his client had one main request: She wanted to visit Redstone one last time.
Los Angeles County Superior Court Judge David J. Cowan said he intends to focus the trial on two key issues: Whether Redstone was competent last fall when he abruptly switched his healthcare arrangements, and whether he was unduly influenced by the people who surround him.
Cowan reversed his previous rulings earlier this week and ordered Redstone to answer questions in a short deposition.
Whatever the outcome of the trial, the case has exposed deep dysfunction within the Redstone family.
Among other things, court records revealed how Redstone sparred with his daughter and once offered her $1 billion to relinquish her stake in the family business. But that deal never came to fruition. Last month, Redstone’s granddaughter, Keryn, described an angry hospital exchange between the mogul and his daughter over whether Redstone should have a feeding tube installed.
Even small details were leaked, including Redstone’s request that Frank Sinatra’s “My Way” be played at his funeral.
The uproar over the case, which rattled Viacom investors, prompted Redstone to step down as executive chairman of Viacom and CBS in February, just days after a psychiatrist hired by Herzer examined him.
On Wednesday, CBS Chairman and Chief Executive Leslie Moonves was asked about Redstone and his legacy. His response:
“Sumner’s legacy? Sumner is still alive and well,” Moonves said.