Examination: Redstone competent
Psychiatrist’s finding is revealed after visit with Viacom chief.
Sumner Redstone is mentally competent, according to a UCLA geriatric psychiatrist who has examined the ailing media mogul twice during the last two weeks.
Redstone’s legal team filed a motion Friday in Massachusetts probate court that seeks to derail a lawsuit filed by Viacom Chief Executive Philippe Dauman, who is trying to quickly get his seat back on a trust that eventually will oversee the mogul’s $40-billion media empire.
The court documents included excerpts from the doctor who concluded that Redstone has the “legal mental capacity” to make decisions about the trust. Redstone, during visits in May with Dr. James Spar, had harsh words for Dauman, his protege, saying he had done “a bad job running Viacom.”
The account of the doctor was intended to counter dramatic claims by Dauman that Redstone is “in the grip of a neurological disorder and other serious ailments” that could include dementia.
Redstone’s attorney’s court filing also maintained that Dauman and another Viacom board member, George Abrams, have no standing in the dispute over who should serve as trustees to the Sumner Murray Redstone National Amusements Inc. Trust because they are not Redstone’s beneficiaries. The trust eventually will oversee the ailing 93year-old mogul’s controlling interest in Viacom and CBS Corp.
“Plaintiffs filed this action as part of an acutely self-interested legal strategy that they began plotting months earlier to secure their tenuous positions with Viacom Inc.,” according to the motion by Bruce Singal, a Boston attorney who represents Redstone. The motion seeks the dismissal of Dauman’s request for an expedited trial and asks for the case to be moved to Los Angeles.
Despite a severe speech impediment that makes it difficult to communicate, Redstone, the controlling shareholder of Viacom Inc. and CBS Corp., is still in command of his faculties and has the power to make changes to his trust, Redstone’s court documents said.
An attorney for Dauman and Abrams cast doubt on whether the words attributed to the mogul were actually his.
“Once again Mr. Redstone is heard only through carefully crafted remarks distributed by his advisors,” attorney Les Fagen said in a statement.
“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,” Fagen said.
Lawyers for Redstone have been gearing up for the latest challenge over Redstone’s mental capacity. They are seeking to blunt allegations that the mogul has been under the undue influence of his daughter, Shari Redstone, who is Dauman’s chief adversary.
Spar visited with Redstone on May 20, the day Dauman and Abrams were notified by fax they were being removed from the Redstone trust.
Dauman and Abrams filed a lawsuit in Massachusetts last week in an attempt to block their removal from Redstone’s trust and from the board of National Amusements Inc., the Redstone family investment vehicle that holds the controlling shares of Viacom and CBS.
The initial hearing in that case is scheduled for Tuesday in Canton, Mass.
The psychiatrist said he questioned Redstone about his rationale for booting his longtime friends and business associates, Dauman and Abrams. “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,’ ” Spar recounthed in the statement.
Viacom board members have said that, despite repeated requests, they have been prevented from visiting Redstone at his home.
The burden of proof is on Dauman and Abrams to prove that Redstone lacks capacity or is under the undue influence of his daughter, according to legal experts.
In his report, Spar said he delved into Redstone’s thinking, asking him to explain why he was unhappy with Dauman.
“He indicated that he had been following the value of Viacom stock over the past year, and knew that it had declined significantly,” Spar said.
The proposed sale of a stake of Paramount Pictures has become another factor in the dispute between Redstone and Dauman.
“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’),” Spar said.
Fagen responded: “As for Dr. Spar’s report on Paramount, evidently neither the doctor nor his patient understand that as of 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.”
Spar administered a mini-mental state exam, which is used to test cognitive functions, and determined that Redstone had only a “mild degree” of cognitive impairment.
Spar had been used to bolster Redstone’s case against his former companion, Manuela Herzer, in a suit filed last year in Los Angeles. That dispute was dismissed last month, although the Los Angeles judge deciding the matter stopped short of declaring Redstone mentally competent.
“The judge in California never found that Sumner has capacity,” Columbia University Law School Professor John C. Coffee said in an interview last week.
Redstone’s lawyers probably will have to demonstrate that Redstone has the ability to make complicated business decisions, he said.
“The factual question that needs to be established is whether the decision to remove the Viacom directors falls in the outer reaches of his mental cognition — or did Redstone recognize that he did not have the members of the trust whom he wanted,” Coffee said.