US court keeps Viacom board in place for now

A US judge has allowed five directors of media giant Viacom to keep their board seats for now, blocking at least temporarily their removal by controlling shareholder Sumner Redstone.

But the move could turn the focus of the case to the embattled directors' request in a different court to quickly order a mental competency review of the 93-year-old Redstone, amid a taut struggle with his daughter for control of the firm after he dies.

Late Wednesday, Delaware judge Andre Bouchard told lawyers for the five directors, including Viacom chairman and chief executive Philippe Dauman, that they could remain in place until he holds a hearing in July on the legality of Redstone's order.

On June 6 Redstone's Delaware-incorporated National Amusements Inc, which has 80 percent control of Viacom, replaced the five in a move that would effectively give Viacom vice chair Shari Redstone, who is her ailing father's legal caretaker, control of the company.

Another of the sacked directors, Frederic Salerno, immediately asked a Massachusetts court to block the move.

He branded it a "brazen and demonstrably invalid attempt" by Shari Redstone to take over the $40 billion entertainment business, which controls hit names like MTV, Nickelodeon, and Comedy Central, as well as Hollywood giant Paramount Pictures. 

Dauman and Salerno maintain that Sumner Redstone's longtime wishes were for the company to be guided by independent and professional management rather than family members when he dies.

Salerno told the Massachusetts court that Sumner Redstone "is being manipulated and used by his daughter in an attempt to accomplish her long-held goal of gaining complete control of Viacom."

Dauman and Salerno say Sumner Redstone suffers "from overwhelming physical ailments, including an inability to speak, stand, walk, eat, write or read," leaving his daughter in effective control. 

Bouchard said he would not move quickly to rule on the removal of the five directors, noting the ongoing litigation in the Massachusetts court as well as in California over the company.

But the directors are not permitted to make any major decisions on the business, which precludes them from moving ahead with the planned sale of Paramount Pictures, which the Redstones oppose.

Source: AFP