Tuesday, September 29, 2015
The Ninth Circuit Court of Appeals has held that the sole beneficiary of a multimillion dollar trust that was created by the founder of Herbalife lacked the standing to challenge a bankruptcy courts approval of a settlement agreement. The Court ruled that a Trust beneficiary is not a “party in interest” and could only sue to enforce the terms of the Trust. In the opinion Judge Jay Bybee wrote that "in general, a trust beneficiary is not the entity positioned to take legal recourse to protect the trust assets, unless the beneficiary is seeking only to enforce the terms of the trust." The heir’s objection to the settlement agreement was not an action to enforce the terms of the Trust according to the court.
See Jack Bouboushian, Ninth Circuit Sidelines Young Herbalife Heir, Courthouse News Service, September 29, 2015.