This surprising turn of events comes after CBS, Viacom and National Amusements spent months discussing a potential remerger of CBS and Viacom, approximately 12 years after the companies first split.
CBS went on to accuse Redstone of interfering with the CBS board nomination process, of acting to undermine CBS' "highly lauded and successful management team in a series of escalating attacks", and blocking another unnamed acquisition partner from pursuing a deal with CBS. "These escalating attacks make it hard for management to perform its duties and threatens continuity of management", the filing states.
"The five members of CBS's special committee, all independent directors of the company, unanimously believe that the CBS Board has a fiduciary duty to act now to protect all stockholders and prevent Ms. Redstone from continuing to misuse her power as a controller, in breach of her fiduciary duties", the suit continues.
According to reports, CBS has always been reluctant to do the deal, first starting in 2016, when Redstone initially pushed the idea. The dividend would not dilute CBS stockholders holdings.
The CBS board is considering issuing a dividend from Class A stock to shareholders across Classes A and B to dilute National Amusements' voting interest from 79 percent to about 17 percent.
The dividend would not dilute the economic interests of any CBS stockholder, but would help the company to operate as an independent, non-controlled company and fully evaluate strategic alternatives, the company said.
Shares of CBS were up more than 3 percent in morning trade on May 14 while Viacom shares declined almost 7 percent. "Judges typically are sympathetic to applications for temporary restraining orders when there is a matter of great seriousness that might be upset if this injunction isn't put in place".