Redstone countersues CBS alleging power grab by Moonves
Washington (AFP) –
The Redstone family controlling CBS filed a countersuit Tuesday alleging an illegal power grab of the media company by the board and its chief executive Les Moonves.
The latest legal action comes amid an ugly war for control of the US television giant and a hotly disputed plan to merge it with media rival Viacom.
The lawsuit was filed in a Delaware court by National Amusements Inc., a holding company directed by Shari Redstone acting on behalf of her ailing 95-year-old father, Sumner Redstone.
The complaint, filed on the heels of a CBS lawsuit against the Redstones, says Moonves and the CBS board acted illegally by trying to dilute the special voting shares that give the family control of the company.
It contends the family had no intention, despite the claims by the CBS board, of forcing a merger with Viacom, which is also controlled by the Redstone family and was split from CBS in 2006.
The only logical explanation for the CBS action, accord to the lawsuit, is that Moonves "has tired of having to deal with a stockholder with voting control and has taken particular umbrage that the exercise of such stockholder's control has migrated from Sumner Redstone to his daughter, Ms. Redstone."
The lawsuit said the board backed Moonves after he delivered an ultimatum -- threatening to resign, with a $180 million "golden parachute" payment -- unless the structure of the company was changed.
The CBS lawsuit filed earlier this month claimed Shari Redstone was interfering with the board's evaluation of a proposed tie-up with Viacom and was threatening to replace its board members.
Tuesday's complaint says the CBS claims are untrue, and that National Amusements in early May "determined that it no longer supported a merger" with Viacom.
In a statement, National Amusements said, "While Les Moonves is an extremely capable television executive, neither he, nor the board acting at his behest, is entitled to strip NAI of its voting control."
CBS said in a statement Tuesday that its board stands by its claims that National Amusements "misused its power to the detriment of CBS shareholders."
A judge on May 17 denied a CBS request for a restraining order against Shari Redstone and National Amusements.
The CBS board went ahead with its plan, subject to court approval, for a special dividend which would have the effect of diluting the voting power of the Redstones.
© 2018 AFP