Sumner Redstone forced to borrow $100 million from National Amusements: lawsuit

Reuters News
Posted: Oct 25, 2016 2:37 PM

By Dan Levine

(Reuters) - Media mogul Sumner Redstone on Tuesday sued two ex-girlfriends for civil claims including elder abuse, alleging he was forced to borrow $100 million from the private company that holds his voting shares of CBS Corp and Viacom Inc to cover tax obligations on gifts he gave to the women.

The lawsuit, filed in Los Angeles Superior Court, seeks about $150 million that Redstone's lawyers say he gave to Manuela Herzer and Sydney Holland. Redstone's lawsuit is the newest front in a nearly year-long litigation war between the 93-year-old former Viacom chairman and Herzer.

Ron Richards, an attorney for Herzer, said the lawsuit has no merit. "All of the gifts Mr. Redstone made to my client and to Sydney Holland were made with his full knowledge and blessing," he said.

An attorney for Holland could not immediately be reached for comment.

Herzer had challenged her removal as Redstone's designated healthcare agent last year, saying Redstone was not competent to make the decision. A Los Angeles judge dismissed Herzer's case in May, saying Redstone made it clear in a videotaped deposition that he did not want Herzer making decisions about his care. Herzer has appealed that ruling.

In the lawsuit filed on Tuesday, Redstone says Herzer and Holland engaged in a years long scheme to drain Redstone's wealth by running up credit card bills, selling stock and changing his estate plan.

National Amusements owns 80 percent of the voting shares of CBS and Viacom, but the media mogul controls stock options and other shares of the companies, the lawsuit said.

Herzer and Holland persuaded Redstone to sell those assets, which generated about $100 million in after-tax income, the lawsuit said. Redstone then gave $45 million each to Herzer and Holland.

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However, this triggered matching tax obligations of more than $90 million, the lawsuit said. Redstone then had to borrow $100 million from National Amusements to cover it, the lawsuit said, "because Holland and Herzer had cleaned out Redstone's bank accounts."

The lawsuit also cites several emails from a Redstone nurse saying Herzer and Holland continually berated him and falsely said his family did not want to visit.

Herzer's attorney, Richards, said Redstone is now being manipulated by his family, and Herzer hopes his true mental state will emerge during the course of the lawsuit.

(Reporting by Dan Levine; Additional reporting by Jessica Toonkel and Lisa Richwine; Editing by Steve Orlofsky; Editing by Bill Trott and Steve Orlofsky)