Legal Issues and Katz Sapper Miller and Simon Property Group and Banking & Finance and Mel Simon and Law and Real Estate & Retail

Katz Sapper caught up in Simon estate battle

June 18, 2010

The Carmel accounting firm that has handled work for Simon family members and their companies for decades has become ensnared in the legal battle over Mel Simon’s fortune.

At a court hearing Friday morning in Hamilton County, Katz Sapper & Miller objected to subpoenas it received in February from Melvin’s daughter Deborah, saying the information requested was far too broad.

The search terms included in the subpoenas would yield more than 160,000 pages of tax documents, information that then would have to be reviewed to protect confidential information, said Richard Dick, an attorney for Katz Sapper and its KSM Business Services unit.

The requests also would force the firm to review every work station for deleted files and review archived data stored on computer tapes. Reviewing a single month of tapes would take 39 hours, Dick said.

“It is way beyond anything that could be considered reasonable,” Dick told Judge William Hughes.

Deborah in January sued Melvin’s widow, Bren Simon, contesting changes to Mel's estate plan he signed in March 2009, seven months before his death at age 82. The revisions substantially increased the share of his fortune earmarked for Bren.

The two sides have brawled over nearly every aspect of the case since. During Friday’s hearing, Jack Hittle, an attorney for Deborah, agreed to exclude the backed up data. But he said producing the tax records was not overly burdensome, especially considering all the profits Simon work has generated for the firm over the years.

“They are a sophisticated outfit,” Hittle said. “They should be able to produce these documents.”

Katz Sapper had estimated that producing and reviewing the 160,000 pages of tax records would cost the firm $100,000, and going through the backed up records might add $70,000 in expense.

Judge Hughes did not rule during the hearing, but indicated he likely would require Deborah to pay and require she provide $100,000 to the court clerk as security.

The legal battle has been awkward for Katz Sapper. In addition to handling financial affairs for Melvin and Bren, the firm has done work for Deborah and her brother, David, CEO of Simon Property Group. Further, one of the witnesses to the signing of the estate plan now being challenged was Bruce Jacobson, a retired Katz Sapper partner.

Deborah contends her father was suffering from dementia and didn’t understand what he was doing when he revised the plan, boosting the share of his fortune going directly to Bren from one-third to one-half. Bren, 67, who had been married to Melvin since 1972, contends the changes fully reflected his wishes.

Melvin Simon was one of Indiana’s richest men. Forbes magazine in March 2009 estimated his net worth at $1.3 billion. Shares of Simon Property, his principal holding, have zoomed higher since, perhaps pushing the value of his fortune past $2 billion.

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