What About The Viacom Case

In a trial planned for October, a Massachusetts court is expected to rule on whether Sumner Redstone, the company’s controlling shareholder, was mentally competent to make a series of decisions that would remake the media company, owner of Paramount Pictures, MTV and other cable-TV networks such as Nickelodeon.

On Thursday, a Massachusetts probate court judge rejected a motion by Redstone’s lawyers to throw out a lawsuit filed by CEO Philippe Dauman and director George Abrams that Redstone, Viacom’s chairman emeritus, wasn’t mentally fit to have both men removed from the holding company board that controls Viacom as well as a trust that will assume control of his $40 billion media empire when he does or becomes incapacitated.

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Probate Judge George Phelan in Canton, Mass. rejected a motion by Redstone’s lawyers to throw out the case, setting up the likelihood that a decision is near in the long-running and very public tug-of-war over who will run Viacom, owner of Paramount Pictures, MTV and Nickelodeon.

Phelan said that he would examine the 93-year-old Redstone’s medical records and take additional testimony to determine whether Redstone, who is ailing, was competent to remove Dauman and Abrams from National Amusements Inc., the privately-held movie-theater chain that owns nearly 80% of controlling shares in Viacom and CBS (CBS) , and the six-person family trust.

Redstone and his daughter Shari Redstone would have preferred that the Massachusetts court not taken up the Dauman-Abrams lawsuit thereby deferring to a Los Angeles court where they counter filed to uphold the National Amusements board changes.