Questions Persist Over Redstone's Media Empire

Sumner Redstone

LOS ANGELES (Reuters) - Even as a Los Angeles judge dismissed one case brought by a former girlfriend of media mogul Sumner Redstone, she filed a new lawsuit that threatens to keep salacious allegations about the 92-year-old's lifestyle alive.

The new complaint, filed by Manuela Herzer, 52, in Los Angeles Superior Court on Monday, alleges that Redstone's daughter Shari interfered with the inheritance Herzer was due to receive in his will and invaded her privacy.

A spokeswoman for Shari Redstone called Herzer's new allegations a "baseless attack."

"It is total fiction and continues to speak volumes about Herzer's motivation and character," she said.

The lawsuit asserts that Shari Redstone, during a period when she was estranged from her father, assembled a network of "nurse-informers" within his Beverly Hills mansion to report on his activities and turn the elder Redstone against Herzer.

Shari Redstone paid one of the nurses $10,000 for sending her information, the lawsuit said, adding that the same nurse was fired by Sumner Redstone for unrelated reasons.

"Shari organized and implemented what would eventually become a successful campaign to turn Sumner against Herzer and strip Herzer not only of her role as his health care agent, but also of her inheritance," the lawsuit said.

Herzer, 52, filed the new legal action shortly after a California judge tossed her case seeking to be reinstated as the person designated to make his medical decisions if he was incapacitated. She had argued that Redstone was not mentally competent and had been the victim of "undue influence" by people around him.

Shari Redstone w/attorney

A representative for Sumner Redstone, controlling shareholder of Viacom Inc and CBS Corp, had no comment on Herzer's latest legal move.

Herzer's lawsuit, which seeks at least $70 million in damages, argues that the nurses violated medical privacy laws as part of a conspiracy that started in September 2014.

It also says that one of the nurses, Jeremy Jagiello, controlled Sumner Redstone's access "to his favorite paid 'escort.'"

The woman received at least $7 million from Sumner Redstone, the lawsuit said, including an upfront payment, a house and $4,500 a month in cash that was left for her at the guard gate to his mansion.

Jagiello arranged the woman's visits "and even stayed in the room with Sumner during his intimate encounters" with her, the lawsuit said. He also relayed "supposed love messages" from the woman to Redstone "to increase his influence over Sumner, crossing ethical and professional boundaries without hesitation."

An attorney for Jagiello did not respond to requests for comment.

Meanwhile, the board at Viacom is now considering another pay cut for Redstone, now its chairman emeritus, the WSJ reports.

Manuela Herzer

Redstone controls voting power at both Viacom and CBS through holding company National Amusements, but a year of questions swirling around his mental capacity raised succession questions and prompted both companies to change him out as executive chairman.In January, an under-pressure Viacom cut compensation for Redstone by 85%, to $2M for 2015.

Then in early February, CBS named Les Moonves to replace Redstone as executive chairman, and Viacom took the same action the following day, putting Philippe Dauman in Redstone's place.

The board at Viacom is considering a further pay cut now that the trial has highlighted Redstone's struggles. A video deposition aired in court on Friday showed he struggles to communicate, failing to answer some basic biographical questions about himself and unsuccessfully attempting to spell out some responses.

And Redstone’s lawyers said they plan to file a lawsuit within the next two weeks accusing Herzer and Sydney Holland of elder abuse. Variety reports the complaint will accuse the women of isolating the chairman emeritus of Viacom and CBS from his friends and family, then coercing him into giving them wads of cash and other assets over the course of five years.

Herzer’s attorney, Pierce O’Donnell, called the threatened lawsuit “laughable,” adding: “His two attorneys and a leading psychiatrist blessed these gifts as the result of Sumner’s sound mind and free will. This is obviously a desperate act.”