Sumner Redstone. Photo Credit: David Crotty/Patrick McMullan/Sipa

The Delaware Supreme Court has upheld the dismissal of a derivative suit challenging more than $13 million in payments the Viacom Inc. board made to founder and former chairman Sumner Redstone, even as the billionaire media mogul's declining health prevented him from providing any services of value to the company.

The high court's ruling, published in a two-sentence order on Friday, came just two days after lawyers for Viacom shareholder R.A. Feuer asked a three-justice panel in Dover to overturn a Delaware Court of Chancery judge's decision in October, which found the suit was barred by the broad terms of a settlement in separate litigation releasing Viacom's board members of “any and all” claims predating the August 2016 agreement.

On appeal, Feuer and his Rosenthal, Monhait & Goddess attorneys argued that the settlement, finalized one month after Feuer filed his lawsuit, was an act of “self-dealing,” which allowed a conflicted board to terminate litigation against itself.

“The individual defendants caused Viacom to grant them a release of the derivative claims plaintiff had asserted on behalf of Viacom against them,” Feuer's attorneys said in their briefing to the court.

“Accordingly, the release constitutes classic self-dealing. The court erred by giving effect in this case to the self-interested release and granting defendants' motions to dismiss without affording plaintiff an opportunity for discovery and without entire fairness review.”

Justice Karen L. Valihura signed May 18's order, but did not expand on the court's reasoning. She was joined by Justices James T. Vaughn Jr. and Gary F. Traynor.

The derivative suit centered on $10 million in bonuses and about $3.3 million in salary Redstone, now 94, received between 2014 and 2016, when he was largely absent from the company and suffering from multiple illnesses.

Chancellor Andre G. Bouchard had ruled the claims were released as part of a confidential settlement that resolved three other lawsuits over control of Viacom and its board.

The Viacom directors moved to dismiss Feuer's derivative suit last October, arguing that the complaint failed to state a claim because Viacom had released all directors from liability in the settlement agreement. Feuer countered, saying that the release was ineffective and a self-interested transaction.

Bouchard said Feuer failed to challenge the validity of the settlement agreement or the enforceability of the release.

“Given plaintiff's failure to provide a factual basis for the court to set aside the terms of the release in the settlement agreement, the plain terms of which bar litigation of the derivative claims asserted in this case, the court has no basis upon which to ignore the terms of a presumptively valid release of claims and thus must dismiss the complaint,” he wrote in a 14-page letter opinion.

Bouchard is currently presiding over a CBS Corp. lawsuit accusing the Redstone family's National Amusements Inc., which is the controlling shareholder of both CBS and Viacom, of improperly trying to force a merger of the two media giants.

Sumner Redstone's daughter, Shari Redstone, took over as president of National Amusements in 2016 and holds 80 percent voting power in CBS and Viacom. CBS alleged in its suit that Shari Redstone wants to launch an assault similar to the one in 2016, which resulted in Philippe Dauman's ouster as CEO of Viacom in 2016.

Dauman and Viacom director George Abrams had sued in Massachusetts to be reinstated to the Viacom board, arguing that Sumner Redstone was suffering from “profound physical and mental illness.”

Sumner Redstone responded with his own lawsuit in California seeking to affirm the removals.

One month later, in June 2016, the Network Advertising Initiative issued a written consent that allowed Abrams, Dauman and three other directors to be removed and replaced, sparking two lawsuits to be filed in the Chancery Court. In one case, Frederic Salerno, one of the ousted board members, sought to invalidate the consent and accused Shari Redstone of manipulating her ailing father.

The parties settled the cases that August, agreeing to mutual releases and allowing the directors to keep their posts in exchange for expanding the board by five seats.

Attorneys for Feuer and the Viacom board were not immediately available to comment on Monday.

Feuer was represented by Norman M. Monhait and P. Bradford deLeeuw of Rosenthal Monhait.

The Viacom directors were represented by Jon E. Abramczyk, D. McKinley Measley and Ryan D. Stottmann of Morris, Nichols, Arsht & Tunnell and Edward B. Micheletti, Bonnie W. David and Keenan D. Lynch of Skadden, Arps, Slate, Meagher & Flom.

Sumner Redstone was represented by Michael Tu and William Molinski of Orrick, Herrington & Sutcliffe and A. Thompson Bayliss and David A. Seal of Abrams & Bayliss. Shari Redstone was represented by Anne C. Foster, Lisa A. Schmidt, Kevin M. Gallagher and Nicholas R. Rodriguez of Richards, Layton & Finger.

The case was captioned Feuer v. Dauman.