NEW ORLEANS — A federal judge has set a Feb. 8, 2017, trial date to reach a decision in Tom Benson’s lawsuit seeking to remove shares of the New Orleans Saints and Pelicans from a trust entrusted to his estranged heirs.
Both sides wanted more time to hammer out a settlement, but U.S. District Judge Jane Triche Milazzo on Aug. 25 denied a mutual request from the two parties after hearing from them in her chambers. Milazzo urged both sides to continue trying to reach a settlement in the meantime, however.
Their relationship already strained, Benson, 89, filed a lawsuit last year to remove shares of the sports teams from trust funds set up for his daughter, Renee Benson, and grandchildren Rita and Ryan LeBlanc. The falling out between Benson and his heirs was made public in December 2014.
The elder Benson, who still holds voting stock in Saints and Pelicans, has attempted to remove non-voting shares in the two teams from the funds he established. The funds hold 60 percent of the Saint’s stock and 90 percent of the Pelicans.
Benson sought to entrust the non-voting stock to his wife, Gayle Benson, earlier this year. But lawyers serving as trustees blocked his attempt to swap the shares with other assets.
The sticking point seems to be the value of the assets Benson has tried to swap for shares in the sports teams. Benson is thought to have established the trust with a clause that allows him to switch out assets of equal value.
That equal value requirement probably wasn’t an accident, according to Louisiana State University’s Elizabeth R. Carter, professor of law and legal analyst.
“Rather, that equal value requirement was necessary in order to achieve a particular tax outcome,” Carter told the Louisiana Record.
Benson attempted to replace those shares with an unsecured promissory note, which is “basically an ‘I owe you,’” Carter said.
“The trustees rejected the exchange on the grounds that they did not believe a simple IOU was equivalent in value to the shares being removed. The trustees are bound—as fiduciaries—to follow the terms of the trust and ensure that any exchange was for property of equal value.”
Should the case go to trial, it would likely offer a glimps into the personal finances of Benson and the financial health of the two sports teams involved.
“The courts usually try to encourage litigants to resolve their disputes through settlement talks,” Carter said. “The parties in the trust case were probably also inclined to figure out a settlement in order to keep the terms of the agreement confidential.”
Benson has been given until Sept 9. to file his requested changes to the lawsuit. Both sides have until Oct. 28 to question NBA and NFL representatives.