These amendments are the test of that claim. If Viacom accepts the changes, the entertainment conglomerate will be admitting that National Amusements can act appropriately in regard to Viacom. This would be tantamount to admitting that Mr. Redstone and National Amusements can also remove the board.

No wonder Viacom is taking the full four business days to file the amendments as it thinks through its response.

One tactic would be to try to kick the can down the road. In this situation, Viacom would file the changes with some vague wording that they were illegal but that the time was not yet ripe to challenge the new restrictions.

A second route would be to challenge the changes in court either by refusing to accept them or by declaring them invalid.

A bylaw requiring 100 percent board approval is certainly not the best corporate governance and is unusual, but there is precedent for the validity of this type of bylaw under the law in Delaware, where Viacom is incorporated. (I would also add that all parties involved would be on thin ice if they tried to invoke principles of good corporate governance, as Viacom has been a governance disaster for decades.)

The main precedent supporting a bylaw change like this is in the case Frantz Mfg. Co. v. EAC Industries. In that 1985 case, a board similarly rebelled against its controlling shareholder. The board tried to block a controlling shareholder after the shareholder tried to take control of the company. The controlling shareholder then responded in a manner similar to National Amusements by adopting a bylaw that required all future actions of the board to be unanimous. The Delaware Supreme Court upheld this maneuver, stating that these actions were “permissible” as “an attempt to avoid” the controlling stockholder’s “disenfranchisement as a majority shareholder.”

This case stands as strong precedent allowing National Amusements to proceed with the bylaw requirement. To be sure, it is not dispositive. In the Frantz case, the controlling shareholder was acting to preserve its control. The court thus found that the shareholder was entitled to that control and that its actions were justified and were otherwise not “inequitable.”