Litigation » Main CBS Shareholder Sues Board

Main CBS Shareholder Sues Board

June 6, 2018

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The suit, filed in Delaware’s Court of Chancery, accuses the CBS board of directors of improperly trying to seize control from Shari Redstone, the CBS Corporation’s main shareholder. It stems from a disagreement about CBS’s attempted merger with Viacom, and asks the court to rule on what took place during a meeting at which Leslie Moonves, CBS’s chief executive, and his fellow CBS board members, voted 11-3 to dilute the Redstone family’s voting share, which amounts to roughly 80 percent of the company. It argues that the effort to shrink Ms. Redstone’s influence over the company was “invalid” and a violation of its bylaws. The day before the meeting, Redstone amended the rules so that any vote required a “supermajority” of at least 90 percent. The court will have to interpret the meaning of the board’s vote. If the court chancellor sides with CBS, Ms. Redstone’s voting share will be reduced to less than 20 percent. If the ruling favors her, she will remain firmly in control.

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