SAN FRANCISCO (AFP) - Media giant Viacom's nasty corporate power struggle ended on Friday (Aug 19), with 93-year-old mogul Sumner Redstone remaining atop his empire and chief executive Philippe Dauman walking.
Viacom chief operating officer Tom Dooley took over as interim chief, with Mr Dauman remaining non-executive chairman until he leaves the board on Sept 13, according to a copy of a memo obtained by AFP.
"Late last night the boards of Viacom and National Amusements approved an agreement to settle their dispute," Mr Dooley said in the memo. "The final agreement is expected to be signed and announced shortly."
The agreement expands the size of the board, adding five new directors nominated by National Amusements, according to Mr Dooley.
Various media outlets, including the Wall Street Journal, reported that Mr Dauman agreed to resign in exchange for a US$72 million (S$97 million) severance package.
Under terms of the deal, Mr Dauman would end legal battles against Mr Redstone and his daughter Shari.
The litigation threatened to make public details about the health of Mr Redstone, whose fitness and mental status had already been questioned in legal proceedings by a former companion who described him as "a living ghost".
Viacom's management, led by Mr Dauman and board member George Abrams, have alleged in court that Ms Redstone effectively controls her ailing father and is making a power grab for his US$40 billion media empire.
It includes entertainment conglomerate Viacom, which is home to the Paramount Pictures movie studio, and television group CBS.
Mr Dauman and Mr Abrams sought in a Massachusetts court to speed up their fight against being dismissed as trustees of National Amusements Trust, which controls Sumner Redstone's National Amusements holding company.
They asked the court to quickly order a medical examination of Mr Redstone, alleging he is not mentally competent to make business decisions and that he was being manipulated by his daughter, who was supposedly behind their dismissals.
"He is a 93-year-old man suffering from overwhelming physical ailments, including an inability to speak, stand, walk, eat, write or read," they alleged.
"He suffers from a progressive neurological disease characterized by dementia."
A judge in Delaware last month gave the green light for a separate trial over the removal of five Viacom board members, including Mr Dauman. The trial, scheduled for October, would examine Redstone's ability to manage his operations.
"National Amusements exercised its indisputable rights as Viacom's majority shareholder to make changes to Viacom's board," a spokesman said at the time.
And in California, a judge dismissed a suit by Mr Redstone's former girlfriend Manuela Herzer who alleged he was incapable of making the decision to kick her out of his house, and requested that she be reappointed his caretaker.
Long considered very close to the tycoon, Mr Dauman was ousted in recent months from positions managing the family fortune.
Remaining for a time as non-executive chairman of the board could give Mr Dauman a chance to pitch his plan to sell as much as 49 per cent of Paramount Pictures, according to reports.
That plan is said to be one of the main points of contention with the Redstone family.
Many investors, however, have been critical of Mr Dauman for not reacting more effectively to the rise of online video and a slide in the Viacom share price.