Just days after reports surfaced that Sumner Redstone might be forced to sell CBS or Viacom to pay off a $1.6 billion loan to his National Amusements investment company, documents have emerged showing that the media mogul is divorcing his wife of five years, Paula Fortunato.
LA Times: Amid the ongoing credit crisis, Redstone nearly two weeks ago was forced to sell $233 million of National Amusements’ shares in Viacom and CBS to pay down debt. The Boston-based holding company faces a mid-December deadline to come up with an additional $800 million for the banks.
Fortunately, Redstone made Fortunato sign a prenup, but he tells Variety (below) that he’ll go beyond that in his payout to Fortunato. The divorce money will come out of his own pocket not National Amusements, indicating he won’t resolve this divorce the way he did his last one.
A prenuptial agreement signed by Fortunato before she married Redstone in April 2003 stipulates that she receive at least $5 million, or $1 million for each year of their union, according to people familiar with terms of the agreement.
Those people said any divorce settlement would come out of Redstone’s pocket, not National Amusements’. Redstone’s net worth is largely tied up in his 80% stake in National Amusements, which controls CBS, Viacom, video gaming publisher Midway Games Inc. and a chain of movie theatres.
Redstone’s already reportedly suffering from a major cash crunch, so can he afford to lose more in a divorce? Furthermore, the prospect of losing more money makes it seem like he might take drastic measures to restructure National Amusements’ debt and retain some of his own wealth.
Ironically, it was Redstone’s last divorce that got him into this debt mess in the first place.
Redstone spoke to Variety in further detail about why he decided to end this marriage and the future of his relationship with Fortunato.
Variety: “We realised that my business commitments and my considerable travel on behalf of my companies were inconsistent with Paula’s plans,” Redstone told Daily Variety on Tuesday. “Accordingly, we have reluctantly decided to divorce.”
The divorce paperwork was filed late Friday afternoon in Los Angeles. rumours of a split have been circulating for weeks, with questions arising on any possible impact on Redstone’s empire.
Redstone, however, said the breakup will have no effect on his business holdings.
“While I had a prenuptial agreement, I intend to be very generous with Paula,” he said. “I want her to live a comfortable life for the rest of her life.” Therefore, I will go well beyond the prenup. Naturally, the funds required will be own personal funds.”…
“We intend to be extreme supportive friends in the future,” Redstone said. “After the divorce action was filed, Paula and I had dinner with Brad Grey. The following day, Paula and I had dinner with Sherry Lansing. And the following day Paula and I had dinner with Susan and John Dolgen, thus indicating that Paula and I intend to continue our personal and friendly relationship. Paula is in New York right now visiting family. When she returns, we will be having dinner with friends here in Los Angeles Sunday night. Thus, as I’ve indicated, while we have reluctantly decided on a divorce, still having affection for each other we intend to continue our relationship of friendship and our social life.”
Well, at least she’s getting her meals paid for..
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