|
Investment Advisor
A trust's assets declined significantly due to decisions made by the trust's investment
advisor. The trustee was sued for failure to properly select and supervise the
investment advisor, for failure to ensure that the assets were invested in
accordance with the trust's objectives, and for negligence in tax planning.
The case was finally settled after protracted litigation.
Diverted Distributions
A trust reduced its annual contribution to a charitable beneficiary.
The charity began an investigation and determined that the trust had begun
making contributions to other charities. The charity brought an action against the
trustee, claiming that its distributions had been wrongly diverted to other organizations.
It also brought an action against the law firm that wrote the trust document,
claiming its negligence in drafting the agreement deprived the charity of millions
of dollars. The litigation is ongoing.
Breach of Fiduciary Duty
A Family Office provided services to a number of family trusts. One trust was offered
an opportunity to sell shares it owned back to the company at market prices;
the other trusts were not offered the same opportunity. On advice of counsel,
the family office sold the shares back and did not extend the offer to the
other trusts (it may not have had the right to). Subsequently, the price
of the stock fell dramatically; causing the other trusts substantial
losses. Beneficiaries of these trusts brought an action claiming breach
of fiduciary duty for not extending the buy-back offer. The action went
to trial, and the defendants won. However, legal expenses exceeded
$1 million.
Investment Losses
A trustee desires to diversify the trust's assets and puts some of the funds
into a large, well-known mutual fund. Subsequently, the mutual fund sustains
significant investment losses. An action is brought by the beneficiaries
against both the trustee and the advisor for failure to follow prudent
investment guidelines and failure to invest in accordance with the trust's
objectives. After many months of discovery, the case settles to
avoid defense costs.
|
