Viacom settlement approved after deal reached to protect Sumner Redstone’s granddaughter

A settlement ending the bitter battle over media mogul Sumner Redstone’s mental competency and the future of Viacom Inc. received the blessing of a Massachusetts judge on Friday — but only after an intervention to mend a rift within the famously fractious Redstone family.

Rather than quickly signing off on the corporate settlement involving Viacom, Massachusetts Probate Judge George Phelan prodded lawyers in an effort to protect the interests of Keryn Redstone, a granddaughter of the ailing 93-year-old media mogul.

Keryn Redstone, 34, is one of five beneficiaries of Sumner Redstone’s trust that holds the controlling stock in two media companies, Viacom and CBS Corp. Sumner Redstone created the trust more than a decade ago with the intention of leaving his valuable shares to his five grandchildren.

The trust was designed to treat his grandchildren equally — but a squabble broke out as to whether that would happen.

Keryn Redstone has been on the opposite side of several disputes with her powerful aunt, Shari Redstone, who will eventually oversee the trust with six other trustees.

Shari Redstone has three children; her youngest son also has been designated as an eventual trustee. Her brother Brent (Sumner Redstone’s only son) has two daughters: Keryn and Lauren.

Keryn Redstone’s Los Angeles lawyer, Pierce O’Donnell, had argued that tensions within the Redstone family had already put Keryn Redstone at a disadvantage.

This spring, a planned gift of $6 million to Keryn Redstone was abruptly cut out of Sumner Redstone’s personal estate plan. Keryn Redstone has said that her attempts to visit her grandfather at his Beverly Park mansion were likewise rebuffed. She said she last saw Sumner Redstone on Valentine’s Day.

Sumner Redstone’s lawyer, Robert Klieger, suggested a resolution to provide legal assurances that Keryn Redstone would be treated equally in any trust distributions — and that she be allowed to visit her grandfather.

During an afternoon recess, Klieger, O’Donnell and other attorneys hammered out a deal to clarify a section of the trust to make sure that Keryn Redstone would be on an equal footing with her sister and Shari Redstone’s children, according to Mike Lawrence, a spokesman for Sumner Redstone.

The mogul also agreed to meet with his granddaughter, a visit that is expected to take place in the next few weeks at Redstone’s home near Beverly Hills, Lawrence said.

“I am so grateful to Judge George Phelan for providing me the opportunity to see my beloved grandfather. I am overjoyed that we will soon be reunited,” Keryn Redstone said in a statement distributed late Friday.

“Since February, Shari has isolated him and controlled every aspect of his life,” she said. “I look forward to being able to tell my grandfather how much I have missed him and how much I love him.”

As part of Friday’s agreement, Keryn Redstone withdrew her objections to the settlement reached in the Viacom boardroom showdown.

Sumner Redstone had previously expressed displeasure with Keryn Redstone because of her friendship with his former companion, Manuela Herzer, who brought the lawsuit that spun the extended legal battle into motion last November. O’Donnell also represents Herzer.

The judge emphasized that he would like to see a reunion between Redstone and his granddaughter — and soon.

“I don’t want the human element to get lost in that Sumner Redstone might not have much time left on this Earth,” Phelan said.

The complicated Redstone family dynamics caused a bit of tension for a crowd of lawyers, including those representing former Viacom Chief Executive Philippe Dauman and Viacom board member George Abrams.

On Friday, nearly two dozen attorneys showed up in the Massachusetts courtroom with hopes that they would quickly win the judge’s approval of a stipulation that the high-profile legal battle between Viacom and the Redstone family had been amicably resolved.

Dauman and Abrams were unceremoniously dumped on May 20 as trustees of Sumner Redstone’s trust after decades of service to the mogul. Late last week, Dauman and Abrams agreed to a settlement with Sumner and Shari Redstone with the goal of putting their high-profile clash behind them because it was becoming a drain on Viacom.

As part of the settlement, Dauman and Abrams agreed to drop their claims and resign as members of the Sumner Redstone trust. Dauman also stepped down as Viacom CEO.

But the approval of the Viacom settlement hit a speed bump this week.

Keryn Redstone, who also was a party to the dispute, wasn’t part of the settlement negotiations — nor had she consented to the deal on the table. O’Donnell, her attorney, at one point during Friday’s hearing suggested that Dauman’s and Abram’s case should go to trial to resolve lingering questions over whether Sumner Redstone is mentally competent.

Phelan, the judge, also wondered aloud several times about Redstone’s competency. The judge wanted to know why Dauman and Abrams — who had strenuously argued that Sumner Redstone was incompetent and under the undue influence of Shari Redstone — had suddenly abandoned their claims.

Shari Redstone’s attorney, on behalf of her client, also hailed the outcome of Friday’s hearing, which appears to finally bring an end to months of disputes among the various warring factions.

“I am very pleased for the Redstone family,” Elizabeth B. Burnett, Shari Redstone’s longtime attorney, said in a statement.

“The plaintiffs’ claims filed against Sumner and Shari have been dismissed, the settlement agreement is firmly in place, and Sumner’s decisions have been honored in all respects. This result benefits Viacom, National Amusements and all of the beneficiaries of Sumner’s trust,” Burnett said.

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UPDATES:

6:32 p.m. This article was updated to include comments from Keryn Redstone and Elizabeth Burnett, Shari Redstone’s attorney.

This article was first published at 2 p.m.