Dog Charities Sue For More Leona Helmsley Wealth

Three of the nation's major animal-welfare groups filed what they call a landmark lawsuit in New York today to get a larger share of the fortune Leona Helmsley left to charity at the time of her death in 2007.

The Humane Society of the United States, the American Society for the Prevention of Cruelty to Animals and Maddie's Fund insist that Helmsley wanted much of her more than $5 billion estate to literally go to the dogs than her estate's trustees have so far directed to canine welfare.

The trustees made initial grants of $136 million earlier this year. According to the trustees, $1 million of that amount went to dog-related charities. But the warring sides in this dispute don't agree on much. The animal-rights groups say only $100,000 went to dog-welfare groups, including this.

Whatever the actual amount that has gone to the dogs, what's certain is that the animal-welfare groups believe they and their four-legged charges have been severely shortchanged:

A snippet from the Humane Society's press release:

"Mrs. Helmsley's Trust Agreement and Mission Statement were clear: Help dogs. And the Trustees have not done this. Instead they pursued their own agendas with Mrs. Helmsley's money," said Wayne Pacelle, president and CEO of The Humane Society of the United States.

The groups are trying to make the fight about more than Helmsley's money since they understand that, despite all the many dog lovers in the U.S., there's probably a larger number of people who would find leaving $5 billion to dogs disturbing when there's so much human suffering.

So, in an attempt to win the public relations fight, they argue that if Helmsley's last wishes can be ignored, anyone's can be.

Another snippet from the Humane Society's release:

"Every person with a will or estate—and every charity that relies on bequest income—should be profoundly concerned about this misdirection of funds."

To this, the Helmsley Foundation trustees essentially say "bunk." Actually, they say the language in Helmsley's gives them broad authority to distribute the money. And, as you'd expect, the sample they provide in their press release would seem to support their position.

 

Between 1999 and her death, Mrs. Helmsley signed a number of documents relating to the Trust, including several amendments and two so-called "mission statements." The totality of these documents clearly provided that the trustees — in the language of the document establishing the Trust — "may, in their sole discretion, distribute the net income and principal of the Trust Fund to and among such one or more Charitable Organizations and in such amounts or proportions as the Trustees, in their sole discretion, shall determine."

That is the language of the Trust itself — not a characterization. Moreover, numerous other provisions of the Trust documents fully supported our belief that Mrs. Helmsley had entrusted her successor trustees with — in the twice-stated language of the Trust itself — "sole discretion" to distribute the Trust's money to charities the trustees consider worthy.

Yet we chose instead to act not simply on our reading of the operative language, but with the full imprimatur of the law. There is a procedure under New York law that allows trustees to present weighty issues to the Surrogate's Court, and to seek that court's guidance — or what the statute calls the court's "advice and direction." We did precisely that, filing a petition in Surrogate's Court, asking that court to review and confirm our reading of the documents.

The petition disclosed and presented to the court every conceivably relevant document — the original Trust instrument, the amendments, the "mission statements," and others. The petition presented a detailed analysis of the documents, leading inescapably to the conclusion that the "sole discretion" granted by the Trust to the trustees should be honored. Before filing the petition, we served a copy on the Attorney General of New York State — the legal authority charged with assuring that charities function with integrity to their intended purposes.

Before the court ruled, the Attorney General submitted a written response to the petition, agreeing with us. The Surrogate's Court upheld our position, unambiguously ruling: "[T]he court finds that the trustees may apply trust funds for such charitable purposes and in such amounts as they may, in their sole discretion, determine."

Having both the attorney general and the probate judge decide in their favor to date, the trustees clearly have the legal advantage at this point. And the trustees are sounding like they know it.

They cite Helmsley's own sometimes limited contributions to animal charities in the last years of her life, waving them like a cudgel.

Another excerpt from the trustees' press release:

Even more telling is this: The claim that the Trust was established for dog-related purposes relies on a document entitled "Mission Statement" signed by Mrs. Helmsley in 2004. Between her signing that document and her death — during which time she alone controlled the Trust — Mrs. Helmsley and the Trust gave over $29 million to charities; of that, the amount she and the Trust gave to dog-related charities was exactly zero.

Ouch. That's the equivalent of an alpha dog trying to get a subservient pack member to roll over onto its back.

Typically, a lawsuit like this sets the stage for settlement talks. That may be where all this is headed.