May 26, 2016 / 7:52 PM / a year ago

Viacom CEO Dauman seeks trial by end-Sept over Redstone trust

Philippe Dauman, president and CEO of Viacom, speaks at the Reuters Global Media Summit in New York December 2, 2010.Brendan McDermid/File Photo

(Reuters) - Viacom Inc (VIAB.O) Chief Executive Officer Philippe Dauman has asked a Massachusetts court to expedite a legal challenge to his removal from a trust that will determine the entertainment company's future after controlling shareholder Sumner Redstone dies or is deemed incapacitated.

Dauman and longtime board member George Abrams requested a trial date be set for no later than the end of September, according to a court filing dated May 25. The petition also requests that legal discovery begin immediately and said it would require at least one medical examination of Redstone, who turns 93 on Friday.

National Amusements, Sumner Redstone's privately held movie theater chain, owns 80 percent of the voting stock in both Viacom and CBS Corp (CBS.N).

The outcome of the court case - and who ends up with control over the trust and the National Amusements board - will have wide-ranging implications for Viacom and CBS shareholders and could result in changes at the top of both companies, possibly through mergers and acquisitions.

Redstone removed Dauman and Abrams form the seven-person Sumner M. Redstone National Amusements Inc Trust last week as well as the National Amusements board. A lawyer representing Redstone said at the time that the media mogul had concerns about Viacom's performance.

Dauman fired back on Monday in a lawsuit, stating the move to replace him and Abrams from both the trust and the National Amusements board amounted to an "unlawful corporate takeover" by the mogul's daughter, Shari Redstone.

"We are looking forward to an expedited dismissal of this meritless suit," Shari Redstone said in a statement Thursday.

In the Massachusetts lawsuit, Dauman questioned the mogul's mental competence, a departure from testimony he gave in a California case brought by an ex-girlfriend of Redstone when he removed her as his designated healthcare agent. As part of that legal action, Dauman testified that he had conversations with Redstone and he was engaged and attentive.

Frederic Salerno, Viacom's lead independent director, on Wednesday again asked for a meeting with Redstone.

The meeting would be with Salerno and William Schwartz, chairman of Viacom's governance committee, according to an email from Salerno to Redstone's attorney reviewed by Reuters.

In the email, Salerno outlined a four-point agenda for meeting, which included "greetings and pleasantries about our shared experiences over decades together as colleagues," as well as a question and answer session to get Redstone's thoughts a the board strategy meeting held last week. That meeting included discussion about the possible sale of a stake in movie studio Paramount Pictures.

Michael Tu, Redstone's attorney, said Redstone was considering the meeting request.

Salerno could not be reached for comment.

Viacom CEO Dauman is looking to sell a minority stake in Paramount, and has said he expects to announce a deal in June, while Sumner Redstone has voiced concern about a sale, according to sources.

Redstone has a speech impairment that hinders his ability to communicate. He struggled to speak when questioned by attorneys in the California lawsuit that was dismissed earlier this month, according to a transcript of his testimony.

Separately, Sumner Redstone asked a Los Angeles Court on Monday for an order validating his removal of Dauman and Abrams from his trust and from the board of National Amusements Inc.

Viacom shares ended up 1.3 percent, or 54 cents, at $42.53 on the New York Stock Exchange.

Reporting by Jessica Toonkel in New York and Lisa Richwine in Los Angeles; editing by Jeffrey Benkoe, Bernard Orr

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