CBS Shareholders File Class Action Lawsuit Against National Amusements

CBS Shareholders File Class Action Lawsuit Against National Amusements

CBS stockholders have filed a class-action lawsuit (read it HERE) against the media company’s controlling shareholder, National Amusements, contending the Shari Redstone-run outfit has breached its fiduciary duty.

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The suit contends the execs in charge of NAI, which controls about 80% of CBS and Viacom via a dual-stock ownership structure, “breached and continue to breach contractual, implied obligations and fiduciary duties that they owe to CBS’s Class B stockholders.”

The suit is the latest attempt to challenge the bylaws that give NAI, which was founded by longtime former CBS and Viacom chairman Sumner Redstone, control of the company. CBS, in a special board meeting May 17, voted to overturn the bylaws and reduce NAI’s control to around 20%. NAI then sued over the move.

All of the legal warfare has deep roots, but it flared up after two attempts by Shari Redstone to bring the companies back together. One effort in 2016 was abandoned. The next, which began a few months ago, resulted in the current meltdown. Both sets of talks ran aground over issues over managerial control and compensation, with CBS chief Les Moonves resisting efforts to install current Viacom CEO Bob Bakish as the No. 2 in a combined entity. A larger point of contention is that CBS has insisted that Redstone was trying to force a merger regardless of the downside. NAI emphatically denies that charge.

CBS declined to comment on the suit.

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