A CBS shareholder charges in a new legal filing that corporate board members and CEO Leslie Moonves were “recklessly profligate” when they approved nearly $13 million in pay over three years for one-time chairman Sumner Redstone, after it became clear that he was “incapacitated beyond recovery.”
The most damning new evidence in the amended complaint, filed in Delaware Chancery Court, comes from Redstone’s own admissions about his condition, in a lawsuit against two former caretakers and paramours — Manuela Herzer and Sydney Holland.
The filing says that the corporate leaders looked out for themselves and not CBS. It accuses Moonves, Redstone and other CBS board members of breach of fiduciary duty, waste of corporate assets and the “unjust enrichment” of the one-time corporate titan, now 93 and shut away in his Beverly Park mansion.
The lawsuit on behalf of CBS shareholder R.A. Feuer reinvigorates a lawsuit that shareholders briefly dropped last year, apparently for strategic reasons. It demands that the defendants — including Redstone daughter and fellow board member Shari Redstone — take several actions: admit Redstone’s mental incapacity, repay the company and terminate all payments to Redstone.
The corporate leaders should be forced to pay because “they have all put their fealty and loyalty to Sumner and his family (and their interests) before the interests of CBS and its shareholders,” the lawsuit says. Any damages awarded against the defendants would be repaid to CBS and to lawyers from the firm of Rosenthal, Monhait & Goddess who are waging the legal battle.
A spokesman for CBS Corp. declined to comment. Redstone’s lawyer said the suit was nothing new and referred a request for comment to another attorney who he said was handling the matter. Shari Redstone’s spokesperson did not respond.
The protracted war over CBS and Viacom began in the fall of 2015, when Redstone’s dubious condition was made public in a legal filing by long-time companion Herzer, who went to court to try to establish her right to continue to oversee the health care of the multi-billionaire.
A spate of litigation and corporate intrigue followed. First, Redstone stepped down to emeritus status. Then, in December, he gave up his voting position on the boards of both CBS and Viacom. As Redstone reduced his role, daughter Shari asserted herself and helped force the ouster of Viacom CEO Philippe Dauman. Even as Viacom has tried to stabilize itself under new leadership and CBS has pushed forward under Moonves, several legal actions continue to grind along.
The central claim of the Delaware suit is that Moonves and other board members had an incentive to keep Redstone in charge, even when it became painfully obvious that he no longer had the mental acuity to lead the