A DE judge refused to issue a restraining order against Shari Redstone and her family Thursday, allowing them to continue to keep tight control over CBS Corp. - and possibly begin to replace members of the board.
But the judge's ruling on Thursday may nullify Redstone's recent action.
As for Friday's postponed shareholders meeting, CBS said the board will determine a new date, time and location.
"CBS management and the special committee can not wish away the reality that CBS has a controlling shareholder", the company said in a statement. Avestar Capital LLC purchased a new stake in shares of CBS during the 4th quarter valued at $119,000.
In a statement after the board voted late Thursday, CBS said the dividend it approved, if enacted, "would enable the company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives".
"CBS management and the special committee can not wish away the reality CBS has a controlling shareholder", Thursday's statement from National Amusements reads. As such, NAI issued an amendment to CBS Corp.'s bylaws - a move that would negate any attempts to weaken Redstone's influence.
A CBS special committee had determined the dividend was key to keeping Redstone from merging CBS with Viacom, which the family also controls through its ownership of 80 percent of that company's voting shares, the committee said.
The Redstones haven't (in the judge's view) done anything truly damaging to shareholders yet, so the judge is denying the restraining order; but if they do something that appears truly damaging, the judge may well intervene. Shortly before Wednesday's hearing, she changed the CBS bylaws to require a supermajority vote on matters like this.
Original story: Thursday is a pivotal day in the fight for the future of CBS Corporation.
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"While we are disappointed that the judge did not grant a TRO, the ruling clearly recognizes that we may bring further legal action to challenge any actions by NAI that we consider to be unlawful, and we will do so, " the company said in a prepared statement.
CBS "could not agree more" with that assessment. "As we intend to demonstrate as the case proceeds, the actions of CBS and its special committee amount to a grievous breach of fiduciary duties and show no regard for the significant risks posed to CBS and its investors".
NAI called CBS' dividend scheme an effort to deprive a shareholder of its fundamental voting rights.
After today's ruling, CBS stock dropped to $50.23 before recovering slightly to close at $51.61 today.
"As previously announced, the CBS Board will hold a meeting at 5PM today to consider declaring a dividend of shares of Class A common stock to all of the Company's Class A and Class B stockholders, as is permitted under CBS' charter".
But the open clash is likely to lead to major shakeup in management of CBS assuming a merger with Viacom. Moonves is suggesting that this is breach of fiduciary duty, but as we understand it, only an officer of the company can breach...
NAI said after the CBS board meeting that "it has no intention of forcing a merger that is not supported by both CBS and Viacom".
Redstone, who took over as NAI's overseer after health issues sidelined her billionaire father, opposed the split of the two companies.