Viacom will not be able to sell a stake in Paramount Pictures until a US judge decides on company owner Sumner Redstone’s capacity to make decisions.
The potential sale of a 49% is off the table, while the Viacom board members removed by parent company National Amusements this month will actually remain in place while the Delaware Chancery Court considers the move.
In effect, this ‘Status Quo Order’ means Viacom CEO Philippe Dauman (left), lead independent director Fred Salerno, George Abrams, Blythe McGarvie and William Schwartz are reinstated on an interim basis, but they will not be able make any significant decisions.
This includes working on a deal to sell a stake in Viacom’s prized film studio, or any other move that requires shareholder approval.
Viacom had planned a sale to unlock funds of around US$2 billion to service debts and return shareholder value.
However, the order seems to allow Dauman and Abrams to use Viacom shareholder funds to pay for their PR and legals costs relating to the National Amusements issue.
Dauman and his supporters say Viacom vice chair Shari Redstone and her camp are manipulating Sumner Redstone, who at 93 has faced questions over his mental capabilities for a number of years. They claim attempts to meet the National Amusements founder have been blocked or ignored.
A statement from Sumner Redstone’s strategy team earlier this week denied this was the case, claiming “that fiction has been shattered”.
“When Sumner agreed to make his wishes clear in a face-to-face meeting with independent director Charles Phillips, the Viacom board would not let that happen,” the team said in a statement. “Philippe and his allies long ago stopped caring about what Sumner wants, or even the shareholders generally. It’s all about self-preservation.”
Theatre chain National Amusements is 80% owned by Sumner Redstone with daughter Shari owning the other 20%. The company controls both CBS and Viacom through 80% ownership of voting stocks.