A Delaware judge has denied CBS Corp.’s bid for a temporary restraining order as part of a lawsuit the network filed against controlling owner National Amusements Inc. (NAI) and its owners, Sumner Redstone and his daughter Shari Redstone.
“We are pleased by the court’s decision to deny CBS and its special committee’s unprecedented motion to try to deprive a shareholder of its fundamental voting rights,” NAI said in a statement. “As we intend to demonstrate as the case proceeds, the actions of CBS and its special committee amount to a grievous breach of fiduciary duties and show no regard for the significant risk posed to CBS and its investors.”
CBS has called a 5 p.m. ET meeting of its board today to vote on a provision that would dilute NAI’s controlling shareholder interest to 17 percent, from its current 79 percent ownership, giving CBS shareholders more say over the future of the company. NAI has sought to remerge CBS and Viacom, but CBS Corp. chairman and CEO Leslie Moonves has been cool on that idea.
“While we are disappointed that the judge did not grant a TRO, the ruling clearly recognizes that we may bring further legal action to challenge any actions by NAI that we consider to be unlawful, and we will do so,” the Special Committee of the CBS Board said in a statement. “We remain confident that we will prevail in the lawsuit.”
On Monday, CBS Corp. filed suit against the Redstones and NAI claiming the company “has acted to undermine CBS’s highly lauded and successful management team in a series of escalating attacks, including by talking to potential CEO replacements without Board approval and deriding executives.”
On Wednesday, NAI sent consents to CBS to amend its bylaws requiring that board actions—like the one CBS will take up today—be approved by a supermajority of the CBS board.
Moonves, who is leading CBS’ fight, is company chairman. Shari Redstone, who is on the other end of the feud, is vice chairman of the CBS board.