Shareholders sue for damages, claiming the CBS-Viacom merger was rammed through to protect the Redstone family.
ViacomCBS investors in a sweeping class-action lawsuit allege that controlling shareholder Shari Redstone used her “persistent influence” to push through a controversial merger and sideline those who stood in her way.But Redstone enlisted the support of pliant board members and executives to orchestrate the deal, according to a 117-page lawsuit filed in Delaware Chancery Court, which was made public this week.
Redstone, through a spokeswoman, declined to comment for this article. A ViacomCBS spokesman said: “We believe the complaint is without merit and intend to file a motion to dismiss.”While the merger was part of Redstone’s long-term vision, board members had valid reasons to combine the two companies.
Bucks County initially sued in October, and petitioned the judge for access into internal CBS documents. The judge agreed in late November, finding there was aThe current lawsuit is a consolidation of three previous shareholder claims, including the earlier Bucks County’s case. Redstone’s first attempt to merge the two companies came in 2016 after a management shakeup at Viacom, but she soon retreated.According to the lawsuit, Redstone accelerated her campaign to reunite the two companies a year later, after becoming alarmed by Viacom’s struggles.
She participated in meetings, in which the merger was discussed, and relied on a board member she was friendly with, Candace K. Beinecke, to do her bidding, the suit alleges. Beinecke joined CBS’ board during the September 2018 house cleaning.Redstone continued to “insert herself into the process.” She attended part of the Feb. 22, 2019, meeting of CBS’ nominating and governance committee, even though she wasn’t on that committee.
The suit also suggested that CBS’ advertised search for a permanent CEO to replace Moonves was hollow. Instead,
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