Media mogul Sumner Redstone has removed Viacom (VIA) CEO Philippe Dauman and Viacom board member George Abrams from the seven-person trust that will determine the fate of both Viacom and CBS (CBS) in the event of his incapacitation or death, two people familiar with the situation told Reuters Friday.
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Reuters reported Tuesday that Redstone, who turns 93 next week, had the power to remove certain members of the trust, including Dauman.
The move by Sumner Redstone, gives his daughter, Shari Redstone, who is also on the trust and vice chair of CBS and Viacom, a victory and more certain control to determine the fate of her father's $40 billion media empire. According to documents faxed to Dauman and Abrams, Redstone also removed Abrams and Dauman from the board of National Amusements Inc, the privately held movie company which owns 80 percent voting stake in CBS and Viacom, one of the sources said.
Both sources wished to remain anonymous because they are not permitted to speak to the media.
CBS and Viacom also received faxed notifications, according to Fortune, which first reported Sumner Redstone's move.
A spokesman for Dauman called the steps "illegal and invalid" in an emailed statement to Reuters.
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"They are a shameful effort by Shari Redstone to seize control by unlawfully using her ailing father Sumner Redstone's name and signature. As she knows and as court proceedings and other facts have demonstrated, Sumner Redstone now lacks the capacity to have taken these steps," the spokesman said.
"Sumner Redstone would never have summarily dismissed Philippe Dauman and George Abrams, his trusted friends and advisors for decades."
Abrams did not immediately respond to an email requesting comment. A spokeswoman for Shari Redstone had no immediate comment.
Sumner Redstone and Dauman have worked together for more than 30 years, and Redstone has called Dauman "a great friend." Shari Redstone voted against Dauman's elevation to executive chairman of Viacom in February.
This month, a judge dismissed a lawsuit by a former girlfriend who argued Redstone was not mentally competent to remove her from his advance healthcare directive last October. The case shined a spotlight on Redstone's health.
The mogul struggled to speak when questioned by the ex-girlfriend's attorneys, a transcript of his testimony showed.
The Sumner M. Redstone National Amusements Inc Trust owns about 80 percent of Redstone's privately held movie theater company, National Amusements Inc, which in turn owns 80 percent of the voting rights in both Viacom and CBS.
After Sumner Redstone dies or is incapacitated, the trust will determine all matters that come to a shareholder vote at both companies, including potential mergers or acquisitions.
With the removal of Abrams and Dauman, Shari Redstone will have majority support among the trust's members, who include Shari's son, lawyer Tyler Korff, and David Andelman, another lawyer who is on the CBS board.
The trust's other members are Norman Jacobs, Sumner's divorce lawyer, and Leonard Lewin, an attorney who represented Redstone's first wife, Phyllis, in her divorce from Sumner.
(Reporting by Jessica Toonkel in New York; Additional reporting by Lisa Richwine in Los Angeles; Editing by Robert Birsel)