Author Topic: CBS 2018 LEGAL Conflict and what that could mean for TAR 31 and Beyond  (Read 6883 times)

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Offline theschnauzers

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Notwithstanding all of the speculation about what TAR 31 will or won't be, or the casting, there's another matter to cause concern long term.

It's been gradual over these past 17 years, but except for casting honcho Lynne Spillman and CBS CEO Les Moonves, none of the CBS executives who originally greenlighted TAR back in 2000 remain at CBS. So their newer successors are not necessarily as invested in TAR as that group was.
And it gets more precarious because of an ongoing dispute between CBS current management and board of directors and the controlling shareholder, NAI (the Redstone family, who also control Viacom). There's a court hearing TODAY on a preliminary injunction to prevent the Redstones from interfereing with a proposed special dividend that would dilute the Redstones' controlling interest to a minority position and likely preventing a forced merger with Viacom. If the injunction isn't issued, it could lead to the removal of the management (Moonves) and the board of directors, and a new management might have a totally different view of all current CBS programming.
Something to be aware of as it could impact TAR 31 and the long=term survival of TAR
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Offline ilovetoread

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And it gets more precarious because of an ongoing dispute between CBS current management and board of directors and the controlling shareholder, NAI (the Redstone family, who also control Viacom). There's a court hearing TODAY on a preliminary injunction to prevent the Redstones from interfereing with a proposed special dividend that would dilute the Redstones' controlling interest to a minority position and likely preventing a forced merger with Viacom. If the injunction isn't issued, it could lead to the removal of the management (Moonves) and the board of directors, and a new management might have a totally different view of all current CBS programming.
Something to be aware of as it could impact TAR 31 and the long=term survival of TAR

I was wondering about this. It's crazy to think Moonves could just be out of his job that he's had forever. It will be interesting to see what happens.


Offline dryedmangoez

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That's a good point.  But at the same time we could also think of it the opposite way as well. TAR certainly isn't the jewel for CBS it once was and  It has been treated as such. So who knows? The new bosses might actually think more highly of TAR and not feel the need for casting gimmicks or the need to cross promote the Network's other more prized reality shows.

It could go either way. :duno:

Offline theschnauzers

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Afternoon update: The judge has issued a 24 hour stand in place order until he can rule on the CBS management's TRO motion expected sometime tomorrow.
« Last Edit: May 16, 2018, 06:09:47 PM by theschnauzers »
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Offline theschnauzers

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And it gets more precarious because of an ongoing dispute between CBS current management and board of directors and the controlling shareholder, NAI (the Redstone family, who also control Viacom). There's a court hearing TODAY on a preliminary injunction to prevent the Redstones from interfereing with a proposed special dividend that would dilute the Redstones' controlling interest to a minority position and likely preventing a forced merger with Viacom. If the injunction isn't issued, it could lead to the removal of the management (Moonves) and the board of directors, and a new management might have a totally different view of all current CBS programming.
Something to be aware of as it could impact TAR 31 and the long=term survival of TAR

I was wondering about this. It's crazy to think Moonves could just be out of his job that he's had forever. It will be interesting to see what happens.

NAI (i.e., Shari Redstone and her father) is the controlling majority shareholder of the shares that have a vote, and under Delaware corporation law, they can remove and replace any or all of the board of directors at will, and thereby remove any officer of the corporation including the CEO (Moonves). So yes, it could happen in an instant.
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Offline theschnauzers

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Today's developments left nothing resolved but began to set the stage for a return to the courts
* The judge in yesterday's hearing denied the request for a temporary order to restrain NAI from acting.
* The CBS board did meet and voted 11-3 to approve the special dividend. CBS management says that's sufficient for approval; NAI says that its shareholder consents yesterday make the threshhold 90% of the directors and thus was not approved.
*Consequently, the annual shareholder meeting set for tomorrow was postponed to a time and date TBA.
Both parties are now quite likely to take these disputes back into court as early as tomorrow (Friday).
« Last Edit: May 18, 2018, 11:24:34 AM by theschnauzers »
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Online georgiapeach

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90% would be 13. Wow....
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Offline theschnauzers

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Here's the latest from Deadline.com on the Redstone-CBS dispute:

I will break up the quote of the article to insert comments.

http://deadline.com/2018/05/cbs-challenge-last-minute-bylaw-change-vote-shari-redstone-viacom-national-amusements-1202396129/

Quote

CBS is preparing to challenge a change in the company’s bylaws that would nullify last week’s board vote to diminish the power of its controlling shareholder, Shari Redstone’s National Amusements.

A filing today with the Securities and Exchange Commission signals the company’s plan to challenge the validity of the bylaw change. It’ll argue that SEC regulations mandate giving stockholders 20 days notice before such a corporate action could be taken.

National Amusements disagrees, arguing that the bylaw change takes immediate effect.

This highlights a distinction between what Delaware corporation law permits for a business corporation and what the SEC can require corporations with publicly-owned shares to do under the federal securities laws.

Quote
The timing is critical. National Amusements, which controls a nearly 80% of CBS’s voting stock, changed the network’s corporate bylaws last Wednesday to require a supermajority of directors to support a dividend payment. This modification came ahead of the board’s 11-3 vote Thursday to grant 0.57 share of Class A voting stock to every shareholder, including those who currently hold non-voting shares.

CBS Corporation has two classes of shares. One has voting rights as shareholders, of which the Redstone/NAI group clearly owns a majority, and a non-shareholder voting class, which are the shares that are mostly traded through the stock exchanges that anyone can buy.

Quote
The board’s action, if upheld by the courts, would lessen Redstone’s control over the company by reducing her voting interest from 80% to 20%. A judge in Delaware ultimately will decide the matter. Expect CBS to file an amended complaint this week.

The ramifications of the dispute is now two-fold. The interests of all shareholders are now involved with the plan to give voting shares to all nonvoting shares, and the duty of the directors and officers to take such actions only when it is in the best interests of all shareholders. The CBS management and special directors committee clearly don't see a merger with Viacom has being in CBS' best interests.

Quote
The long-simmering tensions between CBS and Redstone reached a boiling point early last week, when CBS initially sought a temporary restraining order. The aim was to prevent Redstone and National Amusements from taking any actions that would interfere with its efforts to operate as an independent company. Thus far this week, the waters have calmed somewhat, at least on the surface. Shares in CBS and Viacom have both dipped a fraction on lighter-than-average trading volume.

The independent directors of CBS have raised concerns that Redstone would take actions — including even ousting CEO Leslie Moonves, or replacing board members — to a force a merger with corporate sibling Viacom.

National Amusements has repeatedly said that it would not compel any combination that lacked the support of both companies, though it clearly would not stand for any moves by CBS to diminish its control over the network.

There's also the possibility of trying to bring the director voting threshold to the SEC for review, But that would be more time consuming.
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Offline theschnauzers

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Here's the latest from Deadline.com on the Redstone-CBS dispute:

I will break up the quote of the article to insert comments.

http://deadline.com/2018/05/cbs-challenge-last-minute-bylaw-change-vote-shari-redstone-viacom-national-amusements-1202396129/

Quote

CBS is preparing to challenge a change in the company’s bylaws that would nullify last week’s board vote to diminish the power of its controlling shareholder, Shari Redstone’s National Amusements.

A filing today with the Securities and Exchange Commission signals the company’s plan to challenge the validity of the bylaw change. It’ll argue that SEC regulations mandate giving stockholders 20 days notice before such a corporate action could be taken.

National Amusements disagrees, arguing that the bylaw change takes immediate effect.

This highlights a distinction between what Delaware corporation law permits for a business corporation and what the SEC can require corporations with publicly-owned shares to do under the federal securities laws.

Quote
The timing is critical. National Amusements, which controls a nearly 80% of CBS’s voting stock, changed the network’s corporate bylaws last Wednesday to require a supermajority of directors to support a dividend payment. This modification came ahead of the board’s 11-3 vote Thursday to grant 0.57 share of Class A voting stock to every shareholder, including those who currently hold non-voting shares.

CBS Corporation has two classes of shares. One has voting rights as shareholders, of which the Redstone/NAI group clearly owns a majority, and a non-shareholder voting class, which are the shares that are mostly traded through the stock exchanges that anyone can buy.

Quote
The board’s action, if upheld by the courts, would lessen Redstone’s control over the company by reducing her voting interest from 80% to 20%. A judge in Delaware ultimately will decide the matter. Expect CBS to file an amended complaint this week.

The ramifications of the dispute is now two-fold. The interests of all shareholders are now involved with the plan to give voting shares to all nonvoting shares, and the duty of the directors and officers to take such actions only when it is in the best interests of all shareholders. The CBS management and special directors committee clearly don't see a merger with Viacom has being in CBS' best interests.

Quote
The long-simmering tensions between CBS and Redstone reached a boiling point early last week, when CBS initially sought a temporary restraining order. The aim was to prevent Redstone and National Amusements from taking any actions that would interfere with its efforts to operate as an independent company. Thus far this week, the waters have calmed somewhat, at least on the surface. Shares in CBS and Viacom have both dipped a fraction on lighter-than-average trading volume.

The independent directors of CBS have raised concerns that Redstone would take actions — including even ousting CEO Leslie Moonves, or replacing board members — to a force a merger with corporate sibling Viacom.

National Amusements has repeatedly said that it would not compel any combination that lacked the support of both companies, though it clearly would not stand for any moves by CBS to diminish its control over the network.

There's also the possibility of trying to bring the director voting threshold to the SEC for review, But that would be more time consuming.

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Offline theschnauzers

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Not exactly sure how that last post ended up being a full quote of the previous post, but here's the latest on the first business day after the Memorial Day weekend.

National Amusements (the Redstones) has filed a complaint in the US District Court of Delaware against the CBS directors and officers on these same issues, in response to the amended complaint CBS filed in the Delaware (state) Chancery Court late last week.

Not exactly sure how that helps National Amusements, as (1) it will make it easier for CBS to raise the SEC rules on bylaw amendments in publicly held corporations and (2) CBS should be able to successfully move the federal court to hold the federal suit in abeyance as the state proceeding covers the same issues and was already pending.
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Offline theschnauzers

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A public employee pension fund, which owns nonvoting shares in CBS Corporation has filed a lawsuit against National Amusements, Inc., as a class action alleging breach of fiduciary duty by NAI as the controlling voting shareholder. This should demonstrate to a court that the CBS shareholders support CBS management in those other lawsuits and could ultimately raise the cost to NAI in seeking to merge CBS and Viacom.
« Last Edit: June 04, 2018, 02:01:46 PM by theschnauzers »
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Offline theschnauzers

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CBS has rescheduled its shareholders meeting for August 10 at the Langham Huntington in Pasadena, according to documents filed with the Securities and Exchange Commission. It had been postponed from May 17 as a result of the initial legal flareup between CBS and NAI.
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Online georgiapeach

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I have separated out the Discussion of Les Moonves  and the alleged accusations against him.

You can continue that Discussion HERE and the shareholder issues in this topic.

:waves:
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Offline theschnauzers

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Unfortunately, this post involves both topics. So bear with me.
The CBS board of directors is meeting today, and is expected to make some sort of statement/announcement regarding the Moonves situation, including his taking a temporary leave of absence as CEO and/or chairman, and devising an investigation plan over the allegations. The board vice chairman is Shari Redstone. So it's not clear what the board may decide.
The postponed shareholder meeting from May is next week (Friday, August 10th.) So expect developments on the shareholder fight between now and then.
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Offline theschnauzers

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Here's the latest from Deadline.com:
(I'm quoting it because any summary would be just as long.)
https://deadline.com/2018/07/les-moonves-still-cbs-ceo-but-shareholder-meeting-postponed-as-board-seeks-outside-counsel-on-misconduct-allegations-1202436559/

Quote
CBS today said its Board of Directors is in the process of selecting outside counsel to conduct an independent investigation into the allegations facing Chairman and CEO Les Moonves.

As well as letting Moonves keep his position despite multiple claims of sexual misconduct, the board Monday also postponed the annual shareholder meeting, which had been set for August 10. The meeting had already been pushed back from May amid the legal war between CBS and shareholder National Amusements.

No other action was taken on the matter at today’s board meeting, the company said.

The announcement came after a highly anticipated board meeting, which began around 12:30PM ET and lasted over three hours. Perhaps tellingly, the meeting’s outcome was not disclosed until after the close of trading. Shares in CBS, which lost 6% on the news, have retreated another 5% today.

CBS directors had a regularly scheduled meeting planned ahead of the release of quarterly earnings on Thursday, but the gathering took on a heightened sense of urgency over the weekend. Moonves has been under the microscope since Friday morning, when word surfaced about the New Yorker‘s investigation. In the article, published that afternoon, several women said that Moonves had forced himself on them and then retaliated when he did not get the result he was allegedly seeking.

This is uncharted territory for CBS, which has been led for more than two decades by an executive who personified the company and won the elusive respect of Wall Street. Moonves, reflecting his former acting days and rise as a production executive, has always been involved decisions at a micro level, especially in regard to casting, story arcs, scheduling and other fundamental aspects of running a broadcast network.

Each May, he has personally delivered rousing promotions for the value of not just CBS but the broadcasting business during the CBS upfront presentation at Carnegie Hall. In the often risk-averse, number-crunching realm of 21st century media executives, he has cut a distinctive showman’s figure, taking evident relish in enunciating the phrase “America’s most watched network.”

The board deliberations come at an already momentous time for CBS, as it prepares for the October trial start to its legal battle against controlling shareholder National Amusements.

In addition, the composition of the board could change substantially as a result of the annual shareholder meeting. All of the current board members are up for election at the meeting, except Arnold Kopelson who is retiring. Richard Parsons, former CEO of Time Warner, is looking to be added. Some observers and analysts see a scenario in which NAI chief Shari Redstone forces out the board members partial to Moonves and CBS.

The estranged companies, which were part of the same parent from 2000 to 2006, held merger talks in 2016 that were abandoned due to disagreements about compensation and the structure of the management team. They resumed in early 2018 but soon foundered along similar lines, with Moonves clashing with Redstone about the latter’s preference to have Viacom CEO Bob Bakish installed as No. 2 of the combined company, or at least have a board seat.

Some analysts take the view that even a Moonves-les CBS would be more valuable if combined with Viacom, which today looks more likely than it did before the New Yorker report. A combined entity, proponents believe, would not only be cost-efficient but could also be more attractive to the buyers that have already been looking more closely at the companies as potential acquisition targets.
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Offline theschnauzers

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Re: CBS 2018 LEGAL Conflict and what that could mean for TAR 31 and Beyond
« Reply #15 on: September 06, 2018, 10:50:54 PM »
In the midst of the inquiry of harassment allegations and potential exit talks involving Les Moonvee, the CBS independent directors and NAI are said to be in preliminary talks to settle the multiple lawsuit in a way that would prevent a merger and prevent Shari Redstone from assuming control of CBS Corporation. Supposedly the COO of CBS would br the interim CEO while a search for a new CEO would be undertaken.
There are two upcoming court dates in the Delaware Court a status conference in mid-September and a trial date in October, so expect more word about this soon.
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Offline theschnauzers

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Re: CBS 2018 LEGAL Conflict and what that could mean for TAR 31 and Beyond
« Reply #16 on: September 10, 2018, 12:29:55 AM »
While I've yet to see a published media summary tonight, all of the lawsuits between CBS and NAI have been settled, with the installation of the new board of directors, a pledge by NAI not to seek a CBS Viacom merger, and that CBS may consider independent offers to buy the company. What does it mean? At the moment, who knows?
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