Tuesday, August 22, 2006
With the arrival of Carl Christensen of the University of Hawai'i as a fellow guest blogger, I thought mention should made of Broken Trust, the recently published book by the University of Hawai'i Press, by Carl's colleague Randall Roth and U.S. District Judge Samuel King. As most T&E folks know, Roth, King, and several other people brought to light the astonishing scope of the breaches of fiduciary duty engaged in by the trustees of the Bishop Estate, the trust established by the will of Bernice P. Bishop, Princess Pauahi. Though the trust was explicitly for the purpose of creating and maintaining the Kamehameha Schools, by the 1990s the trustees were operating the trust as a private investment fund. That's what the IRS charged was the case when it sought to rescind the trust's charitable status, after the scandal broke into the open. Now, in this book, Roth and KIng describe the development of the trust, the history of the Kamehameha Schools (which is also a history of the struggle of the indigenous Hawaiians following the arrival of European settlers), and the slide into corruption, greed, and colossal mismanagement that eventually resulted in removal of all five of the trustees. One of the delicious ironies of the tale is the fact that the land redistribution program approved by the US Supreme Court in Midkiff resulted in the infusion of billions and billions of cash into the BIshop Estate, thus providing a ready temptation for the unscrupulous trustees. Any property professors who dabble in trusts and the fiduciary duties of trustees in their property courses will want to read this. The T&E people are no doubt already familiar with this sad tale.
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