Legal Issues and Lawsuits and Mel Simon and Law and Philanthropy and Real Estate & Retail

Simon daughter questions using father's estate to pay donations

March 2, 2010

Melvin Simon’s daughter Deborah suggests in court papers that her stepmother Bren is trying to pawn off to her late husband’s estate responsibility for millions of dollars in charitable contributions that should be paid by Bren-affiliated foundations and trusts.

The dispute surfaced after attorneys for Bren, who oversees a trust holding Melvin’s assets, sought court guidance last month on whether the estate should fulfill major charitable pledges while a legal fight over the fortune continues.

Bren’s filing lists pledges to Indiana University, Riley Children’s Foundation, St. Vincent Foundation and the Indianapolis Museum of Art.

In a Feb. 26 response, attorneys for Deborah favor going ahead and paying this year’s charitable commitments that are the responsibility of the estate. But they say the St. Vincent and IMA pledges are not.

Court records show that in March 2007, Melvin and Bren, as co-trustees of the Joshua Max Simon Foundation, pledged a total of $2.4 million—$400,000 annually for six years—to complete and furnish the St. Vincent Primary Care Center on 86th Street. The center was renamed in honor of the couple’s deceased son.

A month later, the couple pledged $10 million to the IMA to endow the museum’s director and CEO. Court records say $5 million was to come from the Melvin and Bren Simon Charitable Foundation No. 1, with $500,000 paid annually for 10 years. The other half was to be paid from a Bren Simon trust after her death.

 “While it is Deborah’s sincere hope that these foundations and Bren ... satisfy these commitments, Melvin, his estate and [his trust] were not parties to the IMA or St. Vincent agreements,” attorneys for Deborah Simon said in a filing.

“Given their plain language, Deborah does not understand why Bren would put at issue whether these pledge agreements should be satisfied” out of estate assets.

Attorneys for Bren could not be reached for comment.

Bren, 66, and Deborah have been battling in court since January, when Deborah filed litigation contesting changes in the will that Melvin executed in February 2009—seven months before he died at age 82.

The changes boosted the portion of Melvin’s estate going directly to Bren from one-third to one-half. They also wiped out the portion that was to go to Deborah and her two siblings from Melvin’s first marriage—Cynthia Simon-Skjodt and David Simon, the chairman and CEO of Simon Property Group.

Deborah contends Melvin was suffering from dementia and even needed help signing his name. Bren, who married Melvin in 1972, asserts the changes reflected Melvin’s wishes, and he understood what he was doing. She acknowledges he needed help with his signature but attributed that to "Parkinsonian symptoms" affecting his right hand.

The skirmish over charitable gifts is the latest twist in an escalating battle over an estate that could be worth $2 billion.

Melvin, co-founder of Simon Property Group, announced giant donations during the final years of his life.

In December 2006, Melvin and Bren announced they were giving $25 million to IU to create the Melvin and Bren Simon Cancer Center and another $25 million to fund a faculty and research endowment. The agreement stipulates that a Simon foundation pay $4 million a year toward the gifts until Melvin’s death, at which time obligations shift to the estate.

The next year, Simon family members announced $40 million in gifts toward completion of a 10-story inpatient tower at Riley Hospital for Children. A Melvin and Bren Simon foundation committed $5 million, and Melvin agreed to pay another $12.5 million in  eight annual installments of $1.56 million. That agreement also stipulates that the expense becomes part of his estate.

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