By Allan Gold, lawyer, lecturer and author.
Vol. 12, #20. – Oct. 28, 2020– ALLAN GOLD’S BLOG
For Family business, Independent business; Local business, Small & Medium Enterprises / SME; Petites et Moyennes Entreprises / PME; etc.
RETIREMENT PLANNING FOR FAMILY BUSINESS OWNERS – BUSINESS EXIT STRATEGY: Protection Mandate (Quebec), Power of Attorney for Personal Care/ Continuing Power of Attorney for Property (Ontario)* (Part 1) by business lawyer Montreal, one of family law lawyers Montreal
A. OPENING –The Sumner Redstone health care fight.
Here’s the take-a-way up front. If you’re a family business owner in Quebec, doing some retirement planning, please include a Protection Mandate amongst the documents on your to-do list. Or if in Ontario, make a Power of Attorney for Personal Care / Continuing Power of Attorney for Property. In answering the “Why?” question, I’ll speak of Sumner Redstone, the U.S. billionaire, who at the age of 97 died in the summer of 2020. You see, he was the central figure in the middle of a 2015 health care fight which made it to court.
B.1 National Amusements
Family business doesn’t have to be small or even private. It might start out that way; but eventually, it could become gigantic! That’s what happened with Sumner Murray Redstone (né Rothstein; May 27, 1923 – August 11, 2020). This gentleman was an American businessman, who built his family’s drive-in theater chain, National Amusements, into a multibillion-dollar empire. As its majority owner and chairman, he became a media magnate, indeed the controlling stakeholder of Viacom and CBS. In March 2018, his fortune was estimated to be 4.9 billion USF. Apart from the fact that he was a business visionary, board room wheeler dealer and tycoon, he was also at the end of life, an elderly person over whom, people were squabbling, urging that they were the right ones who should care for him and speak in his behalf. Of course, it’s unfortunate that he had to go through all of that.
B.2 Health Care Fight case involving Sumner Redstone It’s noteworthy that it was called a “Health Care Fight.” However, I take issue with the statement that it was “a bitter and UNIQUE dispute over the final days of influential media mogul Sumner Redstone.” You see, I don’t regard it as being that unusual. (Source in part: https://www.hollywoodreporter.com/thr-esq/sumner-redstone-health-care-fight-881698 April 07, 2016 8:01am PT by Eriq Gardner )
Philippe Pierre Dauman was a major player in this saga. He was a longtime associate of Sumner Redstone, having served as President, CEO and Chairman of Viacom from September 2006 until May 20, 2016. For purposes of background, it’s a matter of record that Phyllis Redstone, Sumner’s wife of 52 years, did file for divorce in September 1999. Sumner Redstone had a daughter, Shari Ellin Redstone. She’s an American media executive, having been involved in the entertainment industry. She served as the chairman of ViacomCBS and president of National Amusements. In 2008, Sumner Redstone was divorced from his second wife, Paula Fortunato. For additional context, it has been said that since 2008, Sumner Redstone had young girlfriends and relatives apparently eyed them suspiciously. Of course, the huge fortune awaiting Redstone’s heirs might have played into the calculation. So going into year 2015, relations in Redstone’s inner circle were already strained.
As understood, the fight erupted after Sumner Redstone, then 92, threw his longtime companion caregiver, Manuela Herzer out of his Beverly Park home. Redstone instituted a new health care directive, naming Dauman to replace Herzer as his health care agent. In late November 2015, Herzer brought a petition seeking to reclaim her role from Dauman. Herzer challenged Redstone’s mental capacity to amend his health care directive. According to news reports, Herzer had alleged that Redstone was then mostly obsessing over steak and sex. This in turn, caused people to ask about Redstone’s ability to be executive chairman of Viacom and CBS. Dauman questioned Herzer’s ulterior motives. Apparently, Herzer had been set to inherit $50 million and Redstone’s Beverly Park home In response, Herzer and her lawyer Pierce O’Donnell complained that Dauman was allegedly covering up Redstone’s condition. She also complained that Shari Redstone was maneuvering herself into her father’s life after years of tension between father and daughter. On the other hand, Gabrielle Vidal of Loeb & Loeb, the attorney for Sumner Redstone, consistently framed the dispute as an invasion of privacy. In February 2016, a party tried to have the case dismissed. However, the judge did not dismiss the case, but instead, fixed it for trial in May 2016. At this hearing, physicians were expected to offer assessments of Redstone as well as speak about whether Dauman, Shari Redstone, etc. could truly take care of the needs of the subject person. In late spring 2016, with the start of depositions imminent, settlement discussions were advanced.
The case settled – at the time, the deal was subject to the approval of the judge. The terms of the settlement were for the most part private and confidential. However, it was still reported that there was a payout in the millions to Herzer. It was seemingly with a view to remove Herzer permanently from Redstone’s life. Administration of Redstone’s business interests were to be put into the hands of Dauman. As to Redstone’s personal circumstances, it was left that he was to do what he wanted, but it was also said that his daughter would have a greater role to play. And that’s how this stage of one health care fight ended. It seems to me that it left open the possibility for further battles about his care and perhaps a potential trust war.
C. CONCLUSION –
You might dismiss the Sumner Redstone health care fight as being totally irrelevant to you because he was one of the mega rich. To this, I would say, “No. I’m offering it up as an example of what could happen. For me, it might occur in any family. The big money just heightens the intensity of the happening. So do I have your attention …yet?
Quotes of the week.
Here are a few great quotes to learn from.
- “It’s not selfish to love yourself, take care of yourself, and to make your happiness a priority. It’s necessary.” ―Mandy Hale.
- “As the family goes, so goes the nation and so goes the whole world in which we live.” ―Pope John Paul II
I’ve said it before. But it’s well worth repeating. It’s a fine line to walk in order to succeed at retirement. It takes planning – more precisely, it takes retirement planning! DO it now- if you wait, it could be too late for you. And THINK hard – KNOW that if you get it wrong- it’ll bite you in the ass and it will hurt big-time, both in your heart and also your wallet!
― Best wishes to each of you and to your entire family.*
Allan J. Gold
Avocat/Barrister & Solicitor
NO 1 Wood Avenue Condominium
4055 ouest rue Ste. Catherine, suite 128(-A),
Westmount, Québec, Canada H3Z 3J8
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www.allanjgold.com ; Blog: https://allanjgold.com/blog-glm/
D. PREVIEW OF NEXT IN THE BUSINESS LAW BLOG SERIES.
I believe that with this blog series, I may have started you along the way to being more aware of the law for business. I have now started a series on retirement planning. As of late, I’ve been addressing the topic of Business Exit Strategies. I believe that your planning should also deal with personal care. To make my point, I’ve today spoken of the health care fight involving Sumner Redstone. Next time, I’ll provide some analysis and/or commentary on this case. Interested…want to get more information about the current topic, retirement planning or other areas of law written by an “avocat,” one of the family business law lawyers, a business lawyer Montreal, practicing also in the elder law field? See you next time. It won’t take too much time. Remember my byline – it’s “Gold’s Legal Minute*GLM*!” And please don’t forget to join my professional community by entering your e-mail at the prompt.*
E. NOTICE – CAUTION –DISCLAIMER.
The material provided herein is of a general nature, strictly for informational purposes. The interpretation and analysis is not to be misapplied to a personal situation with a particular set of facts. Under no circumstances, are the herein suggestions and tips, intended to bring a reader to the point of acting or not acting, but instead, the hope is that they are to be a cause for pause and reflection. It is specifically declared that this content is not to be a replacement of, or a substitution for, legal or any other appropriate advice. To the contrary, for more information on these presents, related subjects or any other questions, it is the express recommendation of the author that everyone seek out and consult a qualified professional or competent adviser.
*©/TM 2020, 2019, 2015-2018, Allan Gold, Practitioners’ Press Inc. – ALL RIGHTS RESERVED
** ©/TM 2006, 2008, 2018 Allan Gold, Practitioners’ Practitioners’ Press Inc. – ALL RIGHTS RESERVED