Viacom pact OKd after deal reached to help mogul’s kin

Judge in Redstone case prods lawyers to protect interests of a granddaughter.

A settlement ending the bitter battle over media mogul Sumner Redstone’s mental competency and the future of Viacom Inc. received the blessing of a Massachusetts judge Friday — but only after an intervention to mend a rift within the famously fractious Redstone family.

Rather than quickly signing off on the corporate settlement involving Viacom, Massachusetts Probate Judge George Phelan prodded lawyers in an effort to protect the interests of Keryn Redstone, a granddaughter of the ailing 93year-old media mogul.

Keryn Redstone, 34, is one of five beneficiaries of Sumner Redstone’s trust that holds the controlling stock in two media companies, Viacom and CBS Corp. Sumner Redstone created the trust more than a decade ago with the intention of leaving his valuable shares to his five grandchildren.

The trust was designed to treat his grandchildren equally — but a squabble broke out as to whether that would happen.

Keryn Redstone has been on the opposite side of several disputes with her powerful aunt, Shari Redstone, who will eventually oversee the trust with six other trustees.

Shari Redstone has three

children; her youngest son also has been designated as an eventual trustee. Her brother Brent (Sumner Redstone’s only son) has two daughters: Keryn and Lauren.

Keryn Redstone’s Los Angeles lawyer, Pierce O’Donnell, had argued that tensions within the Redstone family had already put Keryn Redstone at a disadvantage.

This spring, a planned gift of $6 million to Keryn Redstone was abruptly cut out of Sumner Redstone’s personal estate plan. Keryn Redstone has said that her attempts to visit her grandfather at his Beverly Park mansion were likewise rebuffed. She said she last saw Sumner Redstone on Valentine’s Day.

Sumner Redstone’s lawyer, Robert Klieger, suggested a resolution to provide legal assurances that Keryn Redstone would be treated equally in any trust distributions — and that she be allowed to visit her grandfather.

During an afternoon recess, Klieger, O’Donnell and other attorneys hammered out a deal to clarify a section of the trust to make sure that Keryn Redstone would be on an equal footing with her sister and Shari Redstone’s children, said Mike Lawrence, a spokesman for Sumner Redstone.

The mogul also agreed to meet with his granddaughter, a visit that is expected to take place in the next few weeks at Redstone’s home near Beverly Hills, Lawrence said.

As part of Friday’s agreement, Keryn Redstone withdrew her objections to the settlement reached in the Viacom boardroom showdown.

Sumner Redstone had previously expressed displeasure with Keryn Redstone because of her friendship with his former companion, Manuela Herzer, who brought the lawsuit that spun the extended legal battle into motion last November. O’Donnell also represents Herzer.

The judge emphasized that he would like to see a reunion between Redstone and his granddaughter — and soon.

“I don’t want the human element to get lost in that Sumner Redstone might not have much time left on this Earth,” Phelan said.

The complicated Redstone family dynamics caused a bit of tension for a crowd of lawyers, including those representing former Viacom Chief Executive Philippe Dauman and Viacom board member George Abrams.

On Friday, nearly two dozen attorneys showed up in the Massachusetts courtroom with hopes that they would quickly win the judge’s approval of a stipulation that the high-profile legal battle between Viacom and the Redstone family had been amicably resolved.

Dauman and Abrams were unceremoniously dumped May 20 as trustees of Sumner Redstone’s trust after decades of service to the mogul.

Late last week, Dauman and Abrams agreed to a settlement with Sumner and Shari Redstone with the goal of putting their highprofile clash behind them because it was becoming a drain on Viacom.

As part of the settlement, Dauman and Abrams agreed to drop their claims and resign as members of the Sumner Redstone trust. Dauman also stepped down as Viacom CEO.

But the approval of the Viacom settlement hit a speed bump this week.

Keryn Redstone, who also was a party to the dispute, wasn’t part of the settlement negotiations — nor had she consented to the deal on the table. O’Donnell, her attorney, at one point during Friday’s hearing suggested that Dauman’s and Abram’s case should go to trial to resolve lingering questions over whether Sumner Redstone is mentally competent.

Phelan, the judge, also wondered aloud several times about Redstone’s competency. The judge wanted to know why Dauman and Abrams — who had strenuously argued that Sumner Redstone was incompetent and under the undue influence of Shari Redstone — had suddenly abandoned their claims.