Battle for Viacom: Redstone names 'loyals' to trust

Billionaire Sumner Redstone named new "loyal" trustees to the trust that controls media giants Viacom and CBS Tuesday, days after firing two long-time allies he has fallen out with.

The move appeared to strengthen the hand of Redstone's daughter Shari in the battle over the future of the $40 billion broadcast entertainment business which controls hit names like MTV, Nickelodeon, and Comedy Central, as well as Hollywood giant Paramount Pictures.

Redstone, 92, said he had selected Tad Jankowski and Jill Krutick for the board of his National Amusements Trust, which through National Amusements Inc. controls the two companies.

Jankowski is executive vice president and general counsel for National Amusements Inc. and Krutick is a former media executive and equity analyst with longtime links to the Redstone family.

They replace Philippe Dauman, the Viacom chairman and chief executive, and Viacom board member George Abrams, who were dropped from the trust on Friday amid a battle over who will control the two media companies when Redstone dies.

At the same time, Redstone named Krutick and Shari Redstone's daughter Kimberlee Ostheimer to the board of National Amusements Inc.

"This is my trust and my decision. I have picked those who are loyal to me and removed those who are not," said Redstone in a statement.

In a court petition to block their removal on Monday, Dauman and Abrams alleged that Redstone is mentally incapacitated and not able to make decisions about his trust. They accused Shari Redstone of abusing her power over her father to seize control of Viacom against his longstanding succession plans.

But Redstone's lawyers said the colorful tycoon made the decisions himself, and blasted the two for suggesting he was not mentally competent to handle his own affairs.

The moves follow a chain of events that began when Shari Redstone won oversight over her father's health care early this month after a court battle with his ex-girlfriend.

Responding to the Dauman/Abrams court move on Monday, Redstone's lawyers asked a separate court to validate their removal from the trust by confirming he was mentally competent to make the decision.

Meanwhile Shari Redstone said in a statement that it is "absurd" to say she controls her father. "Sumner makes his own decisions... and has his own team of independent advisers to counsel him," she said.

At stake is control over two powerful US media companies.

Viacom controls some of the top cable-TV brands. CBS Corp owns CBS television, Showtime and other media properties.

Viacom's management and Dauman in particular have come under shareholder pressure for the company's lagging performance.

On Monday Viacom's broadly-traded B shares jumped 2.3 percent on the news and they added another 2.5 percent to $40.94. The shares remain far below the 2014 peak above $88.