CBS CBS Corp

By Keach Hagey and Peg Brickley 

A Delaware judge said he had concerns about the medical condition of 95-year-old media mogul Sumner Redstone and declined to order that he be deposed in the legal battle between his family's holding company, National Amusements Inc., and CBS Corp.

Judge Andre Bouchard said Wednesday in Delaware Chancery Court that he worries that Mr. Redstone might not be aware of what was being done in his name. The judge struck from the court record representations of the ailing mogul's responses to questions related to the case.

"As a practical reality, I have great skepticism" that Mr. Redstone could engage in the questioning "in a formed, deliberative way," Judge Bouchard said.

CBS is battling National Amusements and its de facto leader, Shari Redstone, for control of the media company. The dispute stems from her desire for CBS and Viacom Inc. to explore a merger against the wishes of CBS.

CBS in May approved a dividend that would reduce National Amusements' voting stake from nearly 80% to about 20%. National Amusements moved to block the dividend by changing CBS's bylaws to require a 90% supermajority for such a change. A trial in the case is set for October.

CBS had asked that Mr. Redstone be deposed in the case, or that any representations in the litigation of his intentions or desires be discounted.

The judge said he would not order Mr. Redstone to be deposed. He also ruled that a video shot in January by Mr. Redstone's longtime friend and CBS director Arnold Kopelson, submitted to the court by CBS as evidence of what it argued was Mr. Redstone's lack of mental capacity, wouldn't be made public.

The Wall Street Journal had requested on Monday that the video, which was submitted under seal, should be made public, arguing that Mr. Redstone's mental status was of public interest to shareholders in CBS and Viacom.

The judge refused National Amusements' request to strike the video from the case record altogether, calling it "highly probative."

Mr. Redstone's health has deteriorated in recent years to the point where he has been unable to communicate beyond grunts.

National Amusements' lawyers argued that Mr. Redstone's health was immaterial because he is just one of seven National Amusements board members voting on the holding company's decisions. However, he owns roughly 80% of National Amusements' stock and has the power to replace all board members.

Judge Bouchard was the judge in a separate legal fight two years ago between National Amusements and Viacom, which it also controls. In that case, Viacom executives and directors argued that Mr. Redstone lacked mental capacity and was being manipulated by his daughter, Ms. Redstone. Ms. Redstone denied the allegation, and the parties ultimately settled the litigation, leading to the overhaul of Viacom's board and management and the rise of Ms. Redstone to power.

Judge Bouchard said that with respect to Mr. Redstone's condition, "I have great skepticism that goes back two years."

In a statement, CBS cheered the judge's ruling, saying it was pleased it will be able to review documents related to the question of who controls of National Amusements and what it described as National Amusements' "coup against the Viacom Board in 2016." The company said it was also pleased the videotape of Mr. Redstone, while confidential, has been deemed relevant to the case.

National Amusements declined to comment.

At Wednesday's hearing, the judge said he isn't ruling on Mr. Redstone's mental competence, but he noted that it could be a central issue in the case.

"Who controls is important as a factual matter and potentially as a legal matter," he said, adding that when he writes an opinion in the case, he is going to have to address "who is calling the shots at NAI."

Write to Keach Hagey at keach.hagey@wsj.com and Peg Brickley at peg.brickley@wsj.com

(END) Dow Jones Newswires

August 08, 2018 15:43 ET (19:43 GMT)

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