Sumner Redstone back in court with feuding family
Yesterday marked the start of a three-day trial in Boston that will determine whether the media mogul's nephew, Michael, is owed anywhere from several million dollars to hundreds of millions of dollars based on a trust with shares in family-owned theater chain National Amusements left to him by Sumner's father, Mickey.
Michael and the shares' trustees originally filed their case in 2006, alleging that he was not compensated fairly for selling his stake in National Amusements, which also serves as Sumner Redstone's holding company for his controlling stakes in Viacom and CBS, back to the company in 1984 for $15 million.
Although it is struggling with $1.46 billion in debt, National Amusements is still a large and valuable company, especially compared to its scale 25 years ago.
A Massachusetts Superior Court dismissed the suit in 2007 on the grounds that the statute of limitations had expired. In an appeal late last year, the state's Supreme Judicial Court upheld most of the decision, but remanded one part back to the superior court: Michael's claim that there was an oral trust created by Mickey Redstone to give him additional shares which he never received
The suit is just one of many battles in the Redstone family over money and control of its media assets. Sumner Redstone has feuded, both publicly and privately, with his children Shari and Brent. He also testified earlier this year dealing with the bankruptcy of Midway Games, a video game publisher he sold in late 2008.
According to two sources close to the case who declined to speak on the record, Sumner Redstone testified on Monday. His brother Edward, Michael's father, will testify tomorrow. Attorney James DeGiacomo, who has worked for the family and previously served as a trustee for Michael, will testify Wednesday.
If the judge rules in Michael Redstone's favor, there will be a subsequent trial to see whether he is owed what the additional shares would have been worth had they been sold in 1984, about $4.3 million plus interest, or what they would be worth today had they not been sold -- a figure likely in the hundreds of millions of dollars.
-- Ben Fritz
Update (Jul 30, 9:45 AM): Watch an excerpt of Sumner Redstone's testimony here, courtesy of Courtroom View Network.
And read more about the trial in today's story in the Times.
Photo: Sumner Redstone at the Tony Awards in June. Credit: Peter Foley, EPA.