Coverage: Sumner Redstone competency suit throw out of court

After six months of legal jabs, a California judge dismissed a case challenging media giant media mogul Sumner Redstone’s mental competency.

And while this decision was an obvious victory for Redstone and his family, the drama is just beginning with his former girlfriend filing yet another lawsuit against Redstone’s daughter and his professional career now coming under more scrutiny.

Joe Flint and Keach Hagey of The Wall Street Journal had the day’s news:

The lawsuit trotting out salacious personal details about media mogul Sumner Redstone is over, but the drama at his $40 billion entertainment empire may be just beginning.

A California judge on Monday tossed out a case challenging the mental competency of Mr. Redstone, a clear personal victory for the controlling shareholder of Viacom Inc. and CBS Corp. But it came at a steep price. During the six-month legal battle, thousands of pages of court documents made public particulars of the 92-year-old billionaire’s intimate relationships, family infighting and his extreme difficulty communicating.

The lawsuit had argued Mr. Redstone was incompetent when he made a decision last fall to evict former girlfriend and longtime companion Manuela Herzer, 51, from his home and remove her as his health-care agent—the person responsible for health decisions should he become incapacitated.

Judge David Cowan of Los Angeles Superior Court dismissed the suit, saying Mr. Redstone, in a videotaped deposition, clearly expressed his desires for Ms. Herzer to be out of his life and for his daughter, Shari Redstone, to oversee his health care, if necessary. However, the judge said he wasn’t making a ruling on Mr. Redstone’s mental capacity. He said there is a presumption that Mr. Redstone has capacity, and Ms. Herzer didn’t prove otherwise.

Gene Maddaus of Variety detailed how Redstone’s former girlfriend immediately filed a lawsuit against his daughter once the case was dismissed:

Moments after a judge threw out her lawsuit seeking to take control of Sumner Redstone’s health care, Manuela Herzer filed a new lawsuit Monday alleging she has been deprived of $70 million in expected inheritance.

Herzer, Redstone’s longtime companion, alleges that Redstone’s daughter Shari conspired with seven nurses to force Herzer out of Redstone’s life and remove her from his estate plan.

“What happened to Sumner Redstone was not the product of free will,” Herzer’s attorney, Pierce O’Donnell, said outside court.”It was the product of an orchestrated devious campaign to take over her father and his estate and to throw the love of his life, Manuela Herzer, out of his house.”

Shari Redstone’s spokesperson responded, “Promptly after her significant loss in court today‎, Herzer continued her baseless attack against the Redstone family with a second lawsuit. It is total fiction and continues to speak volumes about Herzer’s motivation and character.”

The new lawsuit by Herzer appeared to fly in the face of claims by O’Donnell at the outset of the dispute. The lawyer said the ex-girlfriend was interested solely in protecting Redstone and overseeing his care. O’Donnell denied that his client was pursuing her case for financial reasons — noting that she had already received millions from the magnate when the two were still close and therefore did not need to pursue any of his fortune after he was gone.

According to the new lawsuit, Herzer was in line to receive half of a personal trust valued at $150 million. The other half was set to go to Redstone’s girlfriend, Sydney Holland. Redstone also gave Herzer and Holland gifts of $45 million apiece. The taxes on those gifts were to be paid by National Amusement Trust, of which Shari was a 20 percent shareholder.

Emily Steel of The New York Times explained how this case is impacting Redstone’s professional life as well:

For now, too, the ruling maintains the status quo across Mr. Redstone’s business holdings. While the lawsuit concerned Mr. Redstone’s personal life, a decision that he lacked mental capacity could have set off a contentious battle for control at CBS and Viacom. He is a director, chairman emeritus and controlling shareholder of both companies and remains in control until he is declared incompetent or dies.

At that point, Mr. Redstone’s interests in CBS and Viacom are to be held by an irrevocable trust that was created for the benefit of his five grandchildren. Among the trust’s seven voting members are his daughter and Philippe P. Dauman, the chief executive of Viacom, who have disagreed on how the company should be managed.

News emerged late Monday that members of Viacom’s board of directors were evaluating Mr. Redstone’s position at the company after considering the information about his condition that was made public during the trial, according to a person with knowledge of the deliberations.

That information includes the transcript of the videotaped testimony from Mr. Redstone, along with the evaluation by a geriatric psychologist. The judge, in his evaluation of the testimony, said “it is also not in dispute that Redstone suffers from either mild or moderate dementia.”

The board is scrutinizing not only Mr. Redstone’s pay — his total compensation was $2 million in the 2015 fiscal year, down from $13 million the previous year — but also his continued role at the company, this person said.

It is not clear whether the board of directors at CBS is making the same considerations.

Spokesmen for Viacom and CBS declined to comment. The development was first reported by The Wall Street Journal.