Ruling favors Sumner's son

Redstone suit a go

By JILL GOLDSMITH

A Maryland judge has ruled that Brent Redstone's lawsuit against his family holding company National Amusements, father Sumner and sister Shari Redstone can go forward, rejecting a motion to dismiss the case.

Brent filed the suit in February seeking to dissolve National Amusements, "due to the oppressive acts of those in control of the corporation."

Brent, who lives on a ranch in Denver, owns one-sixth of NAI, which controls Viacom and CBS Corp. and runs a worldwide chain of movie theaters. He accused his father, sister and other NAI directors of "self-dealing and favoritism" -- including the transfer of a costly NAI-owned suite in the Pierre Hotel to Sumner Redstone's ex-wife, Phyllis, as "payoff in the couple's divorce" and a rich severance package to Shari's former husband, Ira Korff, after they split and he left the company.

The suit, filed in Maryland Circuit Court in Baltimore, took Sumner Redstone by surprise.

An NAI spokesman said Tuesday: "This is only a preliminary ruling on procedural issues. The judge has not yet made any findings on the merits of the case, which won't go to trial until late 2007. We continue to believe the allegations are completely unfounded and simply an attempt to extract a financial settlement in a family dispute."

However, if settlement talks are indeed in the cards, they're likely to begin in earnest now.

The 14-page suit from Redstone's little-known son, 55, reveals sibling rivalry and thwarted financial aspirations. "Since 1968, plaintiff has reasonably expected to benefit and prosper from his ownership interest in NAI and has relied on that expectation," the suit said.

Brent claimed his father and sister pushed him off the Viacom board and froze him out of major decisions, such as the recent split of the company. He said he expected a big job and a big salary but was sidelined as Shari's stature grew as the head of National Amusements and, more recently, vice chairman of Viacom and CBS Corp. Brent insisted he was cut out for refusing to "rubber-stamp" his father's decisions.

But people close to Redstone and NAI have said he was given a number of posts in which he failed to impress -- including a stint at cable net Showtime and another running NAI's South American operations, which he wanted to do from Denver.

"He turned down every opportunity that could have given him a chance for a role," said one person, who claimed that between salary and family partnerships that Sumner Redstone set up and gave him, Brent Redstone took in more than $1 million last year.

People close to NAI, which is privately held, insisted the suit won't have repercussions on publicly traded Viacom or CBS Corp. Even in the highly unlikely event of dissolution of the holding company, Sumner Redstone would retain control of the remaining entities.

However, at the very least, litigation would be a distraction and an embarrassing public airing of family grievances.

The lawsuit values NAI, including its stakes in Viacom and CBS, at $8 billion, and Brent Redstone is clearly hoping the suit will help him pry loose his share of the pie.

NAI is based outside Boston but incorporated in Maryland.