Thursday, November 20, 2014
As I have previously discussed, a family feud over inheritance between the Griffin Industry heirs has four sisters pitted against three brothers. The sisters brought suit accusing their brothers of misappropriating their inheritance by transferring property the sisters were owed to the family company controlled by the brothers. Last week, a Federal district judge denied the brother's request that the September summary judgment ruling that found they breached their fiduciary duty to their sisters be reconsidered. A trial date has been set for May 5, 2015 and is scheduled to last four weeks. The brothers will present their affirmative defenses at the May trial.
See Andy Brownfield, Trial Set For Griffin Industries Family Legal Battle, Cincinnati Business Courier, Nov. 17, 2014.
Wednesday, November 19, 2014
A 57-year-old South Dakota man has been indicted for multiple counts of wire fraud and money laundering, partially in connection with a scheme in which he stole funds from a disabled beneficiary of a trust that he was trustee of. Randall William McKee is accused of transferring funds from the trust to his business and then transferring the funds from the business to his personal bank accounts. McKee's trial is scheduled for January of next year.
See U.S. Attorney's Office, Sioux Falls Man Charged With Fraud and Money Laundering, FBI, Nov. 10, 2014.
Monday, November 17, 2014
JP Morgan Case & Co. settled a lawsuit by Texas mineral rights owners who accused the company of cutting deals with oil company clients to cheat them out of $691 million in compensation. The dispute centered around payments for rights to drill in Eagle Ford, a shale formation underlying central and southwest Texas that has helped put the U.S. in competition with Saudi Arabia and Russia for title of the world’s largest oil producer.
Beneficiaries of the South Texas Syndicate Trust accused the bank (who were supposedly working on their behalf) of instead concocting advantageous deals with commercial-banking clients Petrohawk Energy Corp. and Hunt Oil Co. for cut-rate prices on the trust’s rights in Eagle Ford.
“The case was resolved with some conditions, and the jury was excused,” a lawyer for the trust beneficiaries said. “[A] sufficient number of beneficiaries will sign the accord at their annual meeting in San Antonio this weekend.” Although an agreement was reached without disclosing the terms, the beneficiaries would receive $40 million from the bank.
JP Morgan denied claims of “self-dealing,” claiming the plaintiffs’ allegations were based on the benefit of hindsight. “A trustee’s dueties and responsibilities are not to be judged by hindsight. There’s not Monday-morning quarterbacking.”
See Margaret Cronin Fisk and Laurel Brubaker Calkins, JPMorgan Settles Claims It Cheated Shale-Rights Owners, Bloomberg Businessweek, Nov. 16, 2014.
Friday, November 14, 2014
New Jersey attorney Barbara Lieberman was charged in March for taking control of financial accounts and stealing funds from her elderly clients. Lieberman was accused of forging documents to make herself power of attorney over clients and adding her name to their bank accounts. Lieberman plead guilty to money laundering, and will face prison time at her February sentencing hearing, which according to the terms of her plea deal will be recommended by prosecutors to be a 10 year sentence.
See David Gialanella, NJ Lawyer Pleads Guilty to Robbing Elderly Clients, New Jersey Law Journal, Nov. 3, 2014.
Monday, November 10, 2014
As I have previously discussed, the $840 million sale of Griffin Industries in 2010 reignited a family feud between four Griffin sisters and three Griffin brothers over inheritance and control of the company. Griffin Industries, created by the siblings' deceased father John Griffin, is a Kentucky animal-rendering company.
The feud that has continued for nearly 20 years may be coming to a close. A January trial date is expected to be scheduled this week. In a previous ruling, it was held that two of the brothers breached their fiduciary duties in their administration of their parents' estates through stock transactions in the 1980s, which gave them control of the company at their siblings' expense.
See Dan Monk, Family Feud: Griffin Industries Inheritance Fight Still Going Strong After 19 Years; Could End Soon, WCPO, Nov. 8, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
Sunday, November 9, 2014
A New Jersey attorney is facing five to ten years in state prison after being charged for theft. The attorney, John F. Hamill, is accused of stealing from two estates, his aunt's and his cousin's, that he was the executor of. Hamill allegedly stole nearly $500,000 from the two estates, by depositing funds into his own account from his aunt's estate and making cash withdrawals from his cousin's estate. The funds are believed to have been used to pay off debts owed by Hamill and for personal use.
See Caitlin Brown, Hudson County Attorney Arrested and Charged with Stealing Almost $500,000 From Estates of Cousin, Aunt, Nov. 7, 2014.
Special thanks to Reid K. Weisbord (Vice Dean, Professor of Law, School of Law-Newark) for bringing this article to my attention.
Wednesday, November 5, 2014
A Florida estate planning attorney will have to pay back his fees collected for estate administration services and cannot discharge the debt in bankruptcy due to his actions constituting breach of fiduciary duty, according to a Federal district court in Florida. The attorney became co-trustee of his deceased client’s trust, and then entered a fee agreement to perform administrative duties for the estate and trust as an attorney. The fee agreement stated that he would charge a fee according to the Florida Probate Code and the Florida Trust Code, but no specified amount or method of calculation.
In West v. Chrisman, the court held that even though the fees listed in the Florida statutes are presumably reasonable, the ambiguity of the fee agreement made it unenforceable and the attorney’s representation to his co-trustee that the statutory fees were required was a breach of fiduciary duty.
See Jeffrey Skatoff, Attorney Fee Computed Under Probate Code Schedule = Breach of Fiduciary Duty, Clark Skatoff, Nov. 5, 2014.
Friday, October 31, 2014
The top appeals court in New York has granted a $44 million bill for legal work that lasted less than five months, rejecting an argument that lawyers for a real estate entrepreneur’s wealthy widow had a “Svengali-like influence” on her.
The New York Court of Appeals also ruled that Graubarb Miller lawyers do not have to return $5 million in gifts they received from Alice Lawrence, saying this claim was made too late.
Taken up by Alice Lawrence’s estate after her death in 2008, the battle over the $44 million legal bill concerns a contingency-fee arrangement that she entered into with the Manhattan law firm. The battle centered around the executor of her husband’s estate and control of his real estate holdings.
In hopes of saving money, Lawrence agreed to pay the firm 40 percent of any future recovery. Within five months, the litigation settled for $111 million. Flabbergasted at paying Graubard the $44 million fee, new litigation ensued.
Yet, in reversing the Appellate Division ruling, the Court of Appeals said Lawrence was bound by the agreement, “She was a competent and shrewd woman who made a business judgment that was reasonable at the time, but which turned out in retrospect to be disadvantageous.”
See Martha Neil, Top NY Court Says Widow’s Estate Must Pay Lawyers $44M for Less Than Five Months’ Work, ABA Journal, Oct. 29, 2014.
Wednesday, October 29, 2014
Whitney Ball plays a large role in the conservative movement. She controls DonorsTrust, a fund that has distributed more than $400 million to underwrite right-wing operations such as the National Rifle Association, the Heritage Foundation, and Americans for Prosperity.
Ball set up this fund fifteen years ago to act as a cashbox for wealthy conservatives who wanted to be sure their money would be used for conservative causes after they die. The priority of DonorsTrust is to “safeguard donor intent.”
A few years ago, Ball became involved in an estate controversy when her father, a lawyer in Virginia, unethically handled the wills of three elderly people and Whitney Ball and her brother personally benefitted from his misconduct, with almost half a million dollars deposited into their bank accounts.
According to the West Virginia Supreme Court of Appeals, which conducted a disciplinary proceeding regarding this matter, John Ball prepared wills for two octogenarian sisters. The court ruled that the “evidence in this case clearly established that Mr. Ball drafted three wills in which he gave himself excessive fees as an executor, drafted two wills that improperly conveyed property to himself and his wife, and assisted in changing a client's annuity to benefit" his children.
The court noted that Ball’s conduct was intentional and violated the rules of professional conduct. Ball’s misconduct resulted in him receiving millions of dollars. The court annulled Ball’s law license and ordered he pay restitution of nearly $3 million to the three estates. This amount included the money that went to his children.
While Whitney Ball and her brother were not accused of wrongdoing or misconduct, the court acknowledged they did receive hundreds of thousands of dollars that had been transferred to them due to the unethical action of their father.
See David Corn, How a Top Conservative Strategist Ended Up With More Than $200,000 in Shady Money, Mother Jones, Oct. 27, 2014.
Tuesday, October 21, 2014
An Austin lawyer and her firm have been sued by fifteen family members, alleging she failed to hire a handwriting expert to show their deceased matriarch’s will was forged and they should have received more from the estate.
The lawyer representing the plaintiffs, William Robertson, commented, “My clients disputed it from day one. The allegation against the lawyer in this case is that there should have been a careful expert examination of the handwriting. That was not done.”
The October 10 original petition and request for disclosure said the plaintiffs hired Holly Gilman and her firm to contest the handwritten will of decedent Carolina Torres. A woman named Lisa Navarro offered the will for probate. Gilman contested the will, arguing it “was fabricated and provided that Lisa Navarro was to receive the largest portion of the assets of the estate of Carolina A. Torres.” At the will contest hearing, no expert testimony was provided, rather writing samples were utilized.
The court ruled against the plaintiffs and found the will to be valid. The plaintiffs subsequently hired a new lawyer and continued to probate the case. The court then made a final ruling and distributed assets in accordance with the will. However, Robertson noted that the “distribution in the will was real lopsided.”
After a handwriting expert was hired, the plaintiffs became aware that the holographic will of Carolina A. Torres was forgery and that Lisa Navarro had perpetrated fraud. The plaintiffs are now suing for negligence, gross negligence and breach of contract.
See Angela Morris, Handling of Handwritten Will Lands Lawyer In Legal-Mal Lawsuit, Texas Lawyer, Oct. 17, 2014.