In 2004, while Viacom was apparently on its way to recording a multi-billion dollar loss, compensation packages totaling about $160 million were approved for several of the company's top executives. A group of shareholders brought a derivative suit action against Viacom, members of Viacom’s Board of Directors, and several executives citing breach of fiduciary duty and unjust enrichment. Defendants sought to dismiss Plaintiff’s motion under Civ. Pro. Rule 12(b)(6).

The Supreme Court of New York decision to allow Plaintiff’s case to go forward turned on the number of independent and disinterested directors on the board. See 2006 N.Y. Misc. LEXIS 2891 (S Ct NY June 23, 2006). The court concluded that a majority did not meet this standard, with the analysis turning the the independence of a single director (Alan Greenberg, who, the court concluded: "The fact that Greenberg advised Redstone in his personal affairs in two large acquisitions, provided services and continues to provide services to Viacom is sufficient to create a reasonable doubt as to his ability to evaluate plaintiffs' demand without a taint of interest, "extraneous considerations" or influences."

In light of the board being interested, the court stated that the compensation packages could be analyzed under the two-pronged entire fairness test: fair dealing and fair price. Had the court decided differently on that one director, the case likely would have been dismissed. Additional primary material for this case may be found on the DU Corporate Governance website.