Settlement talks said to be underway in Sumner Redstone competency case

The high-stakes legal dispute over whether Sumner Redstone is mentally competent to handle his affairs could soon be resolved.

Depositions of Viacom Vice Chair Shari Redstone, the mogul’s daughter, and Viacom Chairman and Chief Executive Philippe Dauman had been scheduled for this week but were postponed to allow settlement talks to proceed, according to two people familiar with the matter who were not authorized to publicly discuss the talks.

The court case has been a distraction for the Redstone family and Viacom by calling into question Sumner Redstone’s limited involvement in corporate affairs in the last two years. Viacom’s assets include the Paramount Pictures movie studio and the Nickelodeon, Comedy Central, BET and MTV cable channels.

In the last few days, the ailing 92-year-old mogul designated Shari Redstone, 61, as the agent in charge of his advance healthcare directive, replacing Dauman, according to two knowledgeable people.

A family friend who lives in Los Angeles was named as an alternate healthcare agent, apparently addressing a concern raised by Los Angeles County Superior Court Judge David J. Cowan that someone in Los Angeles be available to assist Redstone should he need immediate attention. Redstone has round-the-clock nursing care.

Settlement talks heated up in recent days. Some in the Redstone camp have been worried about the volume of sensitive documents apparently stockpiled by Redstone’s former companion, Manuela Herzer, according to one person familiar with the matter.

Herzer brought the competency claim in late November after she was abruptly forced out of Redstone’s life and his home in mid-October.

Until that time, Herzer was overseeing the media mogul’s day-to-day care.

Confidential Redstone family documents already have surfaced, including an email from Redstone to his grandchildren and a proposed settlement agreement between the elder Redstone and his daughter. The proposed agreement -- which was never signed -- would have provided Shari Redstone $1 billion to surrender her interest in the family’s investment vehicle, National Amusements Inc.

Shari Redstone owns 20% of National Amusements. Her father controls 80% of the corporation, which holds the controlling stakes of Viacom Inc. and CBS Corp.

Another leaked email from Sumner Redstone’s attorney revealed dismay that a private investigator had been hired, allegedly by Shari Redstone, to follow her father’s former female companions, Herzer and Sydney Holland.

Redstone ended his relationship with Holland, his former girlfriend, in September after learning of her infidelity, according to court documents.

Cowan had scheduled a five-day trial for early May. Last month, Herzer’s attorney, Pierce O’Donnell, indicated that he was interested in pursuing a settlement on behalf of his client.

Earlier settlement talks, he said, were spurned by the Redstone side.

Until October, Herzer had been in line to receive Redstone’s Beverly Park mansion, which is valued at $20 million, and at least $50 million from his estate after he dies, according to court documents.

Herzer’s case appeared to pick up steam after an outside psychiatrist examined Redstone at his home in late January. Several days later, Redstone stepped down as executive chairman of CBS and later Viacom.

Herzer was a close friend and former girlfriend of the media mogul for many years.

Their friendship dated to 1999, around the time that Redstone’s wife of 52 years, Phyllis Redstone, divorced him. Redstone listed Herzer as the proxy in charge of his advance healthcare directive until Oct. 16, when Redstone named Dauman to fulfill that role.

The Wall Street Journal first reported the settlement talks.

Twitter: @MegJamesLAT

MORE:

Sumner Redstone’s medical records will remain sealed, judge in competency case rules

Disney’s not alone in succession woes

Viacom Chief Philippe Dauman is ordered to testify in Sumner Redstone competency case

Thomas Staggs, heir apparent to Disney CEO Robert Iger, is leaving the company