NEW ORLEANS (AP) — The type of asset swap New Orleans Saints and Pelicans owner Tom Benson is attempting to try to regain complete control of his business interests from recently estranged heirs is being challenged in a new lawsuit in Texas.
The lawsuit has been brought by former San Antonio mayor Phil Hardberger and estate layer Art Bayern, whom a Texas judge recently appointed as co-receivers of one of the trusts Benson set up for his daughter Renee.
They argue Tom Benson should not be able to swap promissory notes for shares of businesses that he'd previously placed in trust for his heirs.
Such swaps were initiated in January, after Benson disowned his daughter and her two children, who are now suing him in both Texas and Louisiana.
The 1980 trust overseen by Hardberger and Bayern does not include shares of the Saints or Pelicans, and their lawsuit, filed Monday in San Antonio, does not focus on who should control the teams.
The primary aim of the lawsuit is to gain clarity on what percentage of Bensco Inc. — a Texas-based company which owns auto dealerships, a bank and real estate — is controlled by the 1980 trust, and what percentage is controlled by either Benson or by 2009 trusts set up to benefit Renee Benson and her children, Rita and Ryan LeBlanc.
Hardberger and Bayern assert that Bexar County Probate Court has jurisdiction to rule on the matter because the trust they've been appointed to oversee is affected by assets placed in subsequent trusts set up by Tom Benson, who is 87.
Tom Benson's attorney, Phil Wittmann, did not immediately respond to an email seeking comment on the newest lawsuit, filed Monday in San Antonio.
His attorneys have argued previously that their client has taken back shares in Bensco and his sports teams from the 2009 trusts through a permissible swap of more than $500 million in assets, including nearly $450 million in promissory notes. But the lawsuit filed by Hardberger and Bayern asks a judge to rule that "no valid substitution of property has occurred" in the 2009 trusts.
So far, the trustee for 2009 trusts, Robert Rosenthal, has refused to approve such an exchange, but not because of the use of promissory notes. Rather, Rosenthal stated no exchange could occur until Tom Benson had certified the value of the assets he was trying to take back.
The lawsuit by Hardberger and Bayern contends that Rosenthal should not accept the promissory notes, either. Those notes are not valid, the lawsuit argues, because they are backed by collateral in the same businesses — including the Saints and Pelicans — that Tom Benson is trying to remove from the 2009 trusts. The lawsuit contends that language in those irrevocable trusts requires Benson to use "other property of an equivalent value" when swapping out assets.
"Promissory notes secured by the same property as is being reacquired does not constitute 'other' property," the lawsuit states. "It is, in effect, the same property."
In January, Tom Benson announced that he had ousted his daughter and her children from executive positions with the Saints, Pelicans and other businesses. He also stated that he intends for his third wife, Gayle, whom he married a decade ago, to assume control of the sports teams and other businesses upon his death.
Soon after, Renee Benson and her children sued in New Orleans, asking a judge to declare Tom Benson mentally unfit to make such decisions. The lawsuit also portrayed Gayle Benson as a scheming manipulator who sought control of her husband's wealth and to isolate him from other family members.
Additionally, Renee Benson filed suit in Bexar County, seeking to block her father from controlling the 1980 trust, arguing that he had abandoned his fiduciary responsibility and improperly banned her from family businesses in Texas.
Last month, Bexar County Probate Court Judge Tom Rickhoff appointed Hardberger and Bayern to oversee that older trust, named for Benson's late first wife, Shirley, who died in 1980.