CBS Slams “Disloyal” Shari Redstone In Attempt To Toss Bylaw Change That Could Lead To Viacom Merger
May 23, 2018
CBS Slams “Disloyal” Shari Redstone In Attempt To Toss Bylaw Change That Could Lead To Viacom Merger
Having failed to get a temporary restraining order last week, CBS today went back to court to halt a big change in the company’s bylaws that cement the power of controlling shareholder, Shari Redstone and National Amusements – power that could see a merger with Viacom
Related
'SEAL Team': John Glenn Joins CBS Series As New Showrunner, Two EPs Depart
“These actions and threats by Defendants are disloyal, inequitable, and not entirely fair,” stated the expected amended filing Wednesday in Delaware by the Les Moonves run media company. “Relief from such actions and threats is necessary to protect CBS and its public stockholders from exploitation by its controlling stockholder.”
Underneath the barbed terms, CBS essentially argued today that the steps Redstone’s NAI took on May 16 to neutralize the actions of a majority of CBS’s directors, who voted to reduce the mogul’s hold over the company by distributing voting stock to all shareholders — including those who currently hold non-voting Class B stock.
The House of Moonves argues that Redstone’s last-minute maneuver is invalid, because Securities and Exchange regulations mandate a 20-day advance notice to shareholders such bylaw changes. National Amusements has maintained that it took immediate effect.
If upheld by the courts, the CBS board’s vote would strike a death blow to the dual-class stock ownership of the media company. It would diminish Redstone’s voting interest from 80% to 20%.
The filing escalates a legal battle that started on May 14, when CBS sought a temporary restraining order against Redstone, seeking to bar her or NAI from interfering with the planned board vote. The independent directors of CBS argued such extraordinary measures were necessary because of concerns that Redstone would take actions — including even ousting CEO Leslie Moonves, or replacing board members — to force a merger with corporate sibling Viacom.
National Amusements has repeatedly said that’s not the case, though it clearly would not stand for any moves by CBS to diminish its control over the network.
Before the Delaware Chancery court reached a decision, ultimately rejecting CBS’s request for TRO, National Amusements changed the network’s corporate bylaws to require a supermajority of directors to support a dividend payment, a threshold the subsequent 11-3 vote failed to meet.
Today’s action follows the immediate fallout of CBS hitting the pause button on its annual shareholder meeting. Following the week of legal and corporate battles plus the upfronts in NYC, that gathering was set to take place on May 18 in the Big Apple. No word yet when the shareholder meeting will actually occur.