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UPDATE 3-Viacom's Redstone may undergo medical exam in competency suit
January 22, 2016 / 11:38 PM / 2 years ago

UPDATE 3-Viacom's Redstone may undergo medical exam in competency suit

(New throughout, adds time for exam, details from ruling)

By Dan Levine and Lisa Richwine

Jan 22 (Reuters) - Viacom Inc’s 92-year-old Executive Chairman Sumner Redstone should be examined by a psychiatrist hired by the ex-girlfriend who has questioned his mental competency, a California judge ruled on Friday.

The decision may provide investors with new information about Redstone’s capabilities. He controls Viacom and CBS Corp , although his role at the companies has grown less visible.

Viacom cut Redstone’s pay 85 percent to $2 million last year, the company said in a securities filing on Friday, citing “reduced responsibilities,”

Geriatric psychiatrist Stephen Read will conduct the court-ordered mental examination within the next 10 days, said Pierce O‘Donnell, an attorney for Redstone’s former girlfriend Manuela Herzer.

Redstone’s attorneys have not indicated whether they will appeal, a development that could affect the schedule. They have argued that Herzer has filed the suit for financial gain.

Read may interview Redstone for up to an hour, Los Angeles Superior Court Judge David Cowan said in his ruling. Redstone’s attorneys acknowledge he has a speech impairment, and Cowan wrote that the executive’s nurses and speech therapists may be present during the exam.

Herzer and her attorneys cannot be present.

Herzer’s lawsuit filed in November said that Redstone had chosen her to make healthcare decisions for him in case he was not able to. It claimed the billionaire was mentally incompetent when he replaced her as his designated healthcare agent on Oct. 16 with Viacom Chief Executive Philippe Dauman.

Read, in a declaration filed in November on behalf of Herzer, said he believed Redstone lacked the mental capacity to make that change. He cited testimony from Herzer and other witnesses but he had not examined Redstone in person.

Redstone’s primary physician, Dr. Richard Gold, told the court Redstone was fully aware of what he was doing at the time.

Gold was deposed by Herzer’s attorneys this month. The judge said in his ruling called Gold’s deposition testimony “equivocal” and “inconsistent” with his declaration.

Gold, who visits Redstone two or three times a week, also testified that “he could not understand Redstone half the time,” Cowan wrote. The new exam can take place at either Redstone’s home or the doctor’s office if Redstone prefers, Cowan said.

Redstone’s advance healthcare directive makes Gold responsible for gauging whether he can manage his own care, court filings show. But the judge said Gold testified that he did not know it was his responsibility. The judge said Gold also testified that he had “no experience” making such decisions.

Gold said he believed Redstone could withstand a short mental exam, Cowan said in the ruling.

Still, Cowan rejected a request by Herzer’s lawyers to depose Redstone. “We are gratified that the Court continues to reject Ms. Herzer’s increasingly desperate and disingenuous attempts to depose Mr. Redstone,” Gabrielle Vidal, an attorney for Redstone, said in a statement.

Redstone’s lawyers said Herzer is pursuing a “personal financial agenda.” They told the judge that at the same time Herzer was removed as health care agent, Redstone had also revoked a part of his estate plan which had left Herzer “a very significant sum of money,” according to the ruling.

Cowan said it was “at least conceivable” that Herzer might care about Redstone’s medical care even if she had a financial interest.

Redstone “has not yet addressed the counter-intuitive notion as to why someone would prefer to have a person across the country care for one’s medical needs in time of emergency,” Cowan added. Dauman is based in New York, while Redstone lives in California.

Lawyers for Redstone have filed a motion to dismiss the case. A hearing on that motion was postponed until Feb. 29. (Reporting by Dan Levine and Lisa Richwine; Editing by Richard Chang and David Gregorio)

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