Sumner M Redstone

Billionaire Sumner Redstone got caught in the credit crunch Friday. The 85-year-old mogul, who has long bragged about his financial savvy and competitive drive, was forced to sell a fifth of his family's stake in his two media companies -- Viacom Inc. and CBS Corp. -- on a day when the companies' shares were trading at record lows. It shows that even the wealthiest people are not immune to the meltdown in the markets and are being thrust into once-unimaginable situations.

Billionaire Sumner Redstone's National Amusements Inc. said Monday that it had sold $233 million worth of stock in Viacom Inc. and CBS Corp. to raise cash to comply with debt covenants -- $167 million less than the company said three days earlier that it would need.

With pressure mounting on media mogul Sumner Redstone to dig his way out of his own credit crisis, the billionaire's privately held firm, National Amusements Inc., was scrambling Friday to renegotiate a $1.6-billion bank loan. The company faces a deadline to repay half the amount, $800 million, by mid-December. National Amusements said Friday that a committee of its board, including Redstone's daughter, Shari Redstone, was holding discussions with the company's bankers.

Media magnate Sumner Redstone has filed for divorce from his wife of five years, Paula Fortunato, citing irreconcilable differences. The split comes as the 85-year-old chairman of Viacom Inc. and CBS Corp. faces financial difficulties. His family-owned holding company, National Amusements Inc., is scrambling to restructure $1.6 billion in debt after it violated the covenants of its bank agreements.

Sumner Redstone hinted Monday that he might sell his family's movie theaters to fix his pressing debt problems. In a conference call with analysts, the 85-year old media mogul said his privately held National Amusements Inc., which operates 1,500 theaters, owns "valuable real estate holdings throughout the country." The company must come up with an $800-million debt payment next month as it negotiates with lenders to restructure $1.6 billion in loans. Redstone, during the call for Viacom Inc.'

Media mogul Sumner Redstone has proposed selling part of his family holding company's movie theater circuit to pare down its debt, according to people close to the situation. A restructuring plan submitted to bankers this week by Redstone's private holding company, National Amusements Inc., also proposed shedding stakes in the video game company Midway Games Inc. and slot machine maker WMS Industries Inc.

Sumner Redstone and his holding companies have sold their shares in Midway Games Inc. for less than a penny each, capping the media mogul's aggressive investment in the troubled video game maker that ended up costing him hundreds of millions of dollars. The $100,000 in proceeds from the sale of Redstone's 87.2% stake to investor Mark Thomas will not help pay down his family company's debt of $1.6 billion.

CBS Corp. and Viacom Inc. Chairman Sumner Redstone reportedly has settled a lawsuit with his son. The lawsuit, filed last year in the Circuit Court of Maryland for Baltimore, claimed that Redstone had tried to "freeze out" his son, Brent Redstone, from National Amusements, the family firm that holds a controlling stake in Viacom and CBS. Terms of the settlement, reported by the online edition of the Wall Street Journal on Sunday, were not disclosed.

CBS Corp. Chairman Sumner Redstone, bowing to shareholder complaints that company directors and top executives were overpaid, cut his salary and cash bonus for 2007 and linked his compensation to the stock's performance. CBS also said in a statement Tuesday that it resolved a case with shareholders who filed a complaint in 2005 charging the company with overpaying top executives.

Media mogul Sumner Redstone has had a love-hate affair with YouTube Inc. this week. No sooner had one company he controls, Viacom Inc., sued the online video site for $1 billion than CBS Inc., which he also controls, struck a major deal with it. Under an agreement announced Thursday, YouTube will show CBS clips from the March Madness NCAA basketball tournament.