It looks like the long estate battle between 95-year-old billionaire Viacom owner Sumner Redstone and his former live-in girlfriend Manuela Herzer has finally come to an end. Yesterday the two sides reached a settlement agreement, and just in time - the parties were about to enter into a second round of litigation over Herzer being removed from Redstone's will in 2015.
When Redstone kicked Herzer out of his life, he also took back the $70 million worth of assets he had allocated to her in his estate and nullified her status as holder of his advanced health care directive. The entire episode led to turbulence in Redstone's corporate media empire, from the board of Viacom to CBS.
Herzer sought to restore her position in Redstone's estate, along with that $70 million she had lost. She contended in her lawsuit that Redstone was mentally incompetent and had been unduly influenced by his daughter Shari, who has since managed to assume control of Viacom's leadership. While that particular bid failed in 2016, the entertainment kingpin then counter-sued, alleging elder abuse by Herzer and another ex-girlfriend. At the end of last year, the court appointed a guardian for Redstone due to his increasingly apparent incapacity.
The settlement, which still must be approved by a Los Angeles Superior Court judge, appears to be decisively in Redstone's favor. Herzer, who at one time resided in the media mogul's Beverly Park mansion and spent a fortune's worth on travel and extravagant shopping sprees, must now pay back $3.25 million to Redstone. That's a far cry from just two years ago, when the Redstone family proposed $30 million to Herzer to cease litigation and any other claims on the estate. Instead, she pressed forward and now finds herself in a disadvantageous position.
Hindsight is 20/20, but Herzer and her attorneys must regret not settling for a comfortable $30 million when they had the opportunity. Instead, she is now obligated to return over $3 million for the various gifts she received as Redstone's girlfriend. If there's one thing I stress as an estate and trust litigator, it's to reconcile whenever possible while protecting core interests. In this case, it looks like all the wealth spent on lawsuits just bought more unhappiness.