National Amusements has blasted CBS Corp.'s legal efforts to dilute the company's voting rights in the Company as "irresponsible" and "inexplicable" into legal filings with the Delaware Chancery Court, where CBS's application for a Interim injunction (19659002) National Amusements Inc. (NAI)'s motion also revealed the name of the CBS board member who was arrested on Monday for bullying behavior against Shari Redstone, CBS Corp.'s majority shareholder. and National Amusements was accused President at the heart of the struggle for control of the company. The file cited independent CBS director Charles Gifford for his involvement in "specific incidents" in 201
CBS Corp. filed a lawsuit against NAI on Monday What she feared would be an effort by NAI to force a merger with Viacom, CBS's former corporate sibling, also controlled by NAI. NAI's submission corroborates the company's claim that it had no intention of enforcing the deal or replacing CBS board members to obtain approval for the deal.
NAI calls CBS's legal move "outrageously exaggerated and unjustified" and an attempt to "enforce an unprecedented usurpation of the voting rights of a controlling shareholder".
NAI claims that CBS's fears are fueled by media reports and "guesses." "It hurts CBS to fail to take steps to negotiate a quiet ceasefire, rather than go to court, and CBS has suggested that its Board members vote on Thursday to propose a special stock dividend to shareholders, the NAIs 79.6% of voting rights in CBS Corp. would dilute to 17%, which would not provide NAI with the same degree of influence it now has over the CBS Board of Directors.
"NAI had and does not intend to have one Merger, be it through the replacement or replacement of members of the Special Committee or otherwise. The plaintiffs' opposite view seems to be based on inappropriate media reports and assumptions, "a NAI lawyer wrote in a letter to the CBS lawyer contained in NAI's response." Needless to say, the action is based on such Reports is both inappropriate and irresponsible. Moreover, it is inexplicable why the plaintiffs, in view of the articulated concerns, find it necessary or appropriate to dilute NAI's voting rights now and forever for all purposes, instead of simply prohibiting a merger as described above, allegedly, to prevent. "
CBS and NAI lawyers had been trying to reach a standstill agreement in the past 48 hours to avoid the spectacle of the TRO hearing, but they could not agree." NAI said in his application that it had offered " to take any action to correct the status quo (including, to avoid doubt, the composition of the Board or measures relating to a proposed combination with Viacom) "in exchange for CBS he agrees to the proposed vote on the scrip dividend and for [Citation needed] Delay of Plenary Assembly Plenary Delays on Friday, July 30, 2007 The flood of legal filings underscores the extent of the resentment between CBS chief Leslie Moonves and Redstone on the future of CBS CBS dismissed NAI 's allegations that CBS board member Gifford was disrespecting
NAI's submission included a statement from another CBS executive member, Robert Klieger, who is a personal advocate for the Redstones. Klieger's statement states that on May 11, three days before CBS's legal start to dilute NAI's voting rights, he faces the Gifford issue with CBS Gordon is chairman of the Special Committee of the CBS Board of Directors, which has evaluated the possible merger with Viacom Last weekend, the committee to which Gifford belongs unanimously agreed that a reunion with Viacom was not at its best It would be unfortunate and debilitating for NAI to make unfounded personal attacks against a member of the CBS Board and its Special Committee as part of its response to the CBS action, CBS said in a statement. "The allegations that concern him are not only vague and unfounded, they completely contradict our knowledge of him. It is noteworthy that he was twice elected to the CBS Board during the years of alleged incidents, in both cases with the support and blessing of Mrs. Redstone and without reservations to the Board or its Nomination and Governance Committee. In fact, it was only six weeks ago that NAI, which controls her, expressed her intention in an SEC filing to re-elect him. This public support was only fitting, because during his many years at CBS, he has always worked with courtesy, integrity and a solid commitment to all of our shareholders. He does not deserve this disreputable attack, which is clearly linked to the fulfillment of his duties in this matter.
NAI's notification notes that the CBS and Viacom special committees evaluating the merger proposal reached an agreement on April 24 on conditions under which CBS will acquire Viacom in an all-stock deal CBS directors and Moonves had also pressed against Viacom to bring his current CEO, Bob Bakish, to No. 2 of the combined company to Moonves.
Sources close to the situation had previously expressed his desire to Redstone to step down as CBS Chairman's CEO within a few years, which is why he wanted to make Bakish his successor, sources close to Moonves deny this characterization of Moonves' intent.
NAI said in her response that CBS & # 39; legal action and to encourage the departure of Moonves and other managers, it also notes that Moonves will reap a massive payout CEO is forced in the midst of the dispute. Moonve's parachute is estimated at $ 150 to $ 280 million, depending on how his stock prices are calculated.
"The plaintiffs have forced the majority shareholder of CBS into the position of having to make a decision by Hobson diluting his voting rights (thereby losing control of the company and suffering the economic damage associated with his participation) or acts as a shareholder to prevent such dilution and to protect its voting rights, knowing that this is the exit of (and payment of massive parachute payments to key management and directors of the company, "states the statement of the NAI." The Board understands undoubtedly that a controlling shareholder would not readily relinquish control, and it is unwise that the board would jeopardize the management of a $ 20 billion company in this way. "
CBS, in response to NAI's appeal argued that the Delaware judge of the TRO conducting the Thursday meeting he CBS should promise to take no immediate action, even if the Board approves the special dividend. CBS has said it will wait until the judge, Chancellor Andre Bouchard, has a chance to weigh the merits of the CBS lawsuit, which accuses Redstone and NAI of breach of fiduciary duty.
"It's not just Ms. Redstone's unwise merger that made these independent directors conclude that the controller posed a significant threat to the company," CBS said. "The defendants desperately seek to avoid a meeting where the full board can consider this recommendation, and a complete record for this court can be prepared to test any challenge."