A Delaware Chancery judge has rejected ViacomCBS’ request to dismiss a lawsuit by Viacom shareholders against Shari Redstone, chairman of ViacomCBS Inc. and president of parent company National Amusements Inc., over her role in last year’s merger with CBS.
The ruling, issued Tuesday, means that shareholders may proceed with their lawsuit against Shari Redstone, daughter of the late Sumner Redstone, who built his family’s drive-in theater chain into the company that oversaw CBS and Viacom as separate entities until they re-merged last December. Viacom CEO Bob Bakish became CEO of the merged company.
The judge, however, dismissed the suit’s claims of breach of fiduciary duty against Bakish, saying no evidence had been presented.
Representatives for National Amusements were not immediately available for comment. A spokesman for ViacomCBS declined to comment.
The original lawsuit, filed in April, blasted Shari Redstone for her “persistent influence” in forcing the $12 million merger that Viacom shareholders said was detrimental to their best financial interest.
The Redstones exerted control over both Viacom and CBS through National Amusements Inc. Sumner Redstone was thought to have preferred to keep the entities independent but according to the lawsuit, while many shareholders believe Shari Redstone had continued to push for the merger in a way that favored her personal power gains.
According to the judge’s opinion, shareholders believed Shari was determined to appoint Bakish as CEO of the combined companies, an effort that ultimately led to Viacom accept a deal they believed was $1 billion less than had been bargained in prior merger talks to achieve controlling stockholder’s governance.
A feud between Shari and Sumner Redstone dominated their relationship for years prior to his death in August 2020 at age 97. When Sumner was in his 80s, he tried to buy out his daughter and said that she was not qualified to lead National Amusements, which Sumner had inherited from his father. In December 2018, a judge declared Sumner incapacitated and in need of a guardian to protect his interests, widely reported to have happened through the efforts of Shari. Father and daughter later reconciled.
Pamela Chelin contributed to this report.