Sumner Redstone competency trial brings soap opera to courtroom

(Bloomberg) — Billionaire Sumner Redstone controls a media empire that still broadcasts soap operas like those from the dawn of TV. Starting Friday, the fading mogul's own saga will spill out in a Los Angeles courtroom like one of those serial dramas: with spurned lovers, a contested will and questions of who's in charge.

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Redstone, 92, who controls Viacom Inc. and CBS Corp., is facing trial over whether he was mentally competent when he threw ex-girlfriend Manuela Herzer out of his home in October and removed her from overseeing his medical care. Besides exposing his frailty, including difficulty speaking and eating, the case will spotlight Redstone's fraught relations with his family and the millions he's lavished on women around him.

The verdict could decide who ends up controlling Redstone's stake in Viacom and CBS, media giants worth $42 billion. While Redstone stepped down as chairman of both in February, he still holds majority voting rights through a family holding company, National Amusements Inc. If he's found incompetent, NAI's board, including his daughter Shari Redstone and Viacom Chief Executive Philippe Dauman, might step in.

"The trial will expose the tragic inconvenient truth that Sumner Redstone needs the court's protection from those who have lied to and exploited him in his debilitated condition," Pierce O'Donnell, Herzer's attorney, said Thursday in a statement.

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The parade of witnesses set to testify about Redstone's mental health and the alleged plotting and scheming by those around him include ex-girlfriends, geriatric psychiatrists and Redstone's own nurses. Others will include Shari, with whom he has had a rocky relationship, a granddaughter who claims Redstone needs court protection from his own daughter, and Dauman.

Absent from the courtroom will be Redstone himself. Los Angeles Superior Court Judge David Cowan, while acknowledging the aging billionaire is the most important witness, agreed to let him testify via a videotape that won't be shown in open court.

Manipulation claim

Cowan ruled Thursday he won't split the trial in two, saying he'll consider whether Redstone was competent when he removed Herzer from her health care role, as well as whether the media patriarch was manipulated into turning over control of his medical care to Dauman.

Herzer, the former girlfriend, filed a petition in November to have a probate judge declare Redstone incompetent and have her reinstated as his health care agent — the individual empowered to make decisions when an elderly or ill person can't. Redstone's lawyers accuse Herzer of being more concerned about his money than his health, because he cut her out of his will at the same time he removed her as his health care proxy.

In a court filing this week, Redstone's lawyers said that in the weeks before she was evicted, Herzer spent more than $200,000 using Redstone's American Express card and had him sign for $40,000 in cash delivered to his house. She executed a $5 million grant agreement with Redstone for her foundation, they said.

In all, according to the lawyers, Redstone lavished about $150 million on Herzer and another former girlfriend, Sydney Holland. They were the primary beneficiaries of his trust and exercised "virtually unfettered" control over his money. Redstone is worth about $4.5 billion, according to the Bloomberg Billionaires Index.

Deception, dishonesty

"She deceived him, he found out about, and he threw her out of the house. Period," Redstone's lawyers said. "It is not for the judiciary to decide whether Mr. Redstone's reaction to her dishonesty was fair or appropriate."

Redstone plans to seek to recover the $150 million from the two, said a person familiar with the matter who didn't want to be identified because it wasn't public.

In October, a lawyer for Redstone evicted Herzer from the billionaire's mansion in the gated Los Angeles community of Beverly Park. Shortly after, she was replaced as health care agent by Dauman and taken out of his estate plan. Herzer had been in line to receive $50 million upon Redstone's death, along with the mansion valued at $20 million. In April, Shari Redstone assumed the role of health care agent for her father.

Herzer, who describes herself as Redstone's longtime friend, companion and caretaker, had lived with him since April 2013, together with then-girlfriend Holland. She dated Redstone from 1999 to 2001 and they have remained close, according to her petition. Redstone's mental health declined rapidly after Holland, who had been unfaithful, left in August, according to Herzer.

The signs of Redstone's deteriorating mental health include an obsession with eating steak, and failing to recall or understand why he can't, Herzer said in her petition. Other signs include, "to the extent he can be understood," wanting to have sex every day, she said. He appears "vacant, expressionless and out of touch with his surroundings," according to Herzer.

'Living ghost'

Herzer claims Redstone was being manipulated by the people around him when he kicked her out of the house and that he has become a prisoner in his own home. She described him as a "living ghost."

Shari Redstone has countered that her father's health has improved since Herzer has been out of his life. Keryn Redstone, the daughter of Redstone's estranged son Brent, has joined the case to support Herzer, arguing that the "tempestuous and difficult" relationship between her grandfather and Shari, her aunt, necessitates court protection.

The two sides were close to a settlement last month, before talks broke down.

With the trial also focused on questions of whether Redstone was manipulated, testimony could turn to the on-again, off-again relations between Shari Redstone and her father, as well as tensions between her and Dauman, his longtime confidant.

Redstone has tussled publicly with his daughter over the years. In 2008, he told CNBC she wouldn't succeed him atop the family empire. In 2010, also on CNBC, he recanted and said his daughter could succeed him in controlling CBS and Viacom. Last year, she wasn't invited to Redstone's birthday party.

Redstone's decision to step down as chairman of both companies also exposed a rift between Shari and Dauman, even though they are allied in the current case. Shari Redstone was the lone dissenter when Viacom's board voted to elevate Dauman to chairman.

The case is In re Advance Health Care Directive of Sumner M. Redstone, BP168725, Los Angeles County Superior Court.

See also:

4 competency planning must-dos

5 ways you can build client relationships with blended families

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