Redstone triumphant, ex-lover says heirs had "insidious plan"

(Bloomberg) — Sumner Redstone lavished millions on his lovers. But there was only one Manuela Herzer.

That, anyway, is the argument lawyers for Herzer made Monday after the curtain dropped on one legal case and abruptly opened on another in the tawdry saga over the ailing media mogul and his $42 billion empire.

Minutes after a judge dismissed her first lawsuit — saying he was persuaded by testimony from Redstone, his speech unsteady with age, that he wanted nothing to do with his former housemate — Herzer filed a second that if nothing else will hold Hollywood rapt a while longer. She said she shared a "sublime relationship" with the 92-year-old billionaire and that his daughter executed an "insidious plan" to strip her of a $70 million inheritance.

That isn't the way Redstone characterized their relationship in his videotaped testimony on Friday, in which he said flatly of the 52-year-old Herzer: "I hate her." His profane descriptions of his feelings brought an end to her challenge to his mental competency and, with it, questions about the immediate future of CBS Corp. and Viacom Inc.

Herzer's lawyer said she would appeal the ruling dismissing the case. Minutes after that decision was issued, she filed the new complaint, claiming Shari Redstone, her two sons and members of the elder Redstone's household staff interfered with her expected inheritance.

"I guess it shows it was all about the money after all," said Jessica Babrick, a probate lawyer with Weinstock Manion in Los Angeles. She said Herzer will have a very hard time winning the case against Shari Redstone after failing to show that Sumner Redstone lacked mental capacity

18 minutes

Los Angeles Superior Court Judge David Cowan said Monday that 18 minutes of testimony, which the judge watched Friday, had been persuasive. "Though Herzer may have believed that Redstone would not be able to say anything, or be able to understand the questions, he did both," Cowan said, though he noted he wasn't "making any ultimate finding relating to Redstone's mental capacity, one way or another, or whether he was unduly influenced."

A transcript of the testimony showed that Redstone, the controlling shareholder of CBS and Viacom, had difficulty speaking. But he was clear when he said wanted Herzer "out of my life." The dismissed suit sought to have Redstone declared incompetent and Herzer reinstated as the agent making his health care decisions.

Meanwhile, Viacom's board is likely to convene next week and discuss cutting Redstone's pay, the Wall Street Journal reported, citing unidentified people familiar with the matter.

Herzer's attorney, Pierce O'Donnell, said he was confident a jury in the new suit "will share our feeling that what happened to Sumner Redstone was not a product of free will but the product of an orchestrated, devious campaign."

'Unique and enduring'

In that suit, Herzer said her "unique and enduring"' relationship with Redstone was a contrast to his "decades-long fractious relationship with his daughter." Herzer dated Redstone from 1999 to 2001 and they remained friends as he dated and married other women, according to the suit. "While he had many girlfriends (at least five of whom he gave millions of dollars each), there was only one Herzer — a best friend for life," according to the suit.

Herzer lived with Redstone from April 2013 until October, for much of that time along with his then-girlfriend Sydney Holland, she said, and his mental health declined rapidly after he broke off with Holland in August. Herzer accused Shari Redstone of spying on her, bribing her father's staff to get information and deceiving her father to turn him again Herzer. "And she succeeded grandly," she said in her new suit. "Sumner — in his horribly weakened and demented condition — believed the lies told to him by the collaborators and eventually decided that Herzer had betrayed him."

Redstone cut Herzer out of his will when he evicted her and replaced her as his health care agent. She had been in line to receive $50 million and his mansion, valued at $20 million.

Tempestuous, difficult

Shari Redstone said in court filings that her father's health has improved since Herzer left. Keryn Redstone, the daughter of Redstone's estranged son Brent, joined in the competency case to support Herzer, saying the "tempestuous and difficult" relationship between her grandfather and aunt necessitated that he be under court protection.

There's a long family history of lawsuits, with Sumner Redstone having been sued by both his son Brent and his nephew Michael. And he and his daughter were well known in Hollywood to often be at odds; in 2007 he made public a letter claiming she had made "little or no contribution" to the family business.

As recently as 2014, Redstone was mulling buying out Shari's 20 percent interest in their family holding company, National Amusements Inc., according to Herzer's court filings. Shari Redstone, in a February filing, said that she and her family were prevented from having meaningful access to her father until Herzer was kicked out of the mansion.

'Total fiction'

Shari Redstone said she and her father have recently grown closer. In his testimony, he said he wanted her to be in charge of his medical care. She said in a statement Monday that new suit is a "baseless attack against the Redstone family" and "total fiction."

The competency case had raised the possibility that trustees of Redstone's estate would be put in charge of his CBS and Viacom shares. He owns majority voting rights through National Amusements; if he were to be declared incompetent, control of that company could shift to seven trustees, among them Shari Redstone and Viacom Chief Executive Officer Philippe Dauman. The dismissal may have been a letdown to investors; CBS shares fell 2.9 percent, and Viacom dropped 2.2 percent.

Trial witnesses would have included Dauman, who was named Redstone's health care agent in October, and Shari Redstone. She replaced Dauman as her father's health care agent this year.

'Bet wrong'

"Ms. Herzer bet wrong when she assumed that Mr. Redstone's difficulty communicating would result in her reinstatement in his life and fortune," Robert N. Klieger, one of Redstone's lawyers, said in a statement. He said Redstone will seek to recover money he lavished on Herzer and Holland. "Mr. Redstone is looking forward to liberating the $150 million in 'gifts."'

Herzer now has a much tougher road ahead of her, both in her appeal and with her new lawsuit, said Kris Knaplund, a law professor at Pepperdine University in Malibu, California. The central question was did Sumner know what he was doing, she said: "The judge seemed to indicate he does."

Now Herzer will have to prove that not only that Shari Redstone took actions against her, but that Sumner changed his will because of those actions.

"She may be able to show Shari said horrible things that weren't true," Knaplund said. "He could say 'I would have done this no matter what my daughter said.' Normally such cases are filed after someone died. If he's alive, you can just go an ask him."

"Manual Herzer has a problem," she said.

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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