A Hamilton County judge has ordered Bren Simon removed as personal representative and interim trustee over her late husband's estate, replacing her with a retired justice of the Indiana Supreme Court.
The ruling by Superior Court Judge William J. Hughes represents a turning point in an ugly family squabble over Melvin Simon's more than $2 billion fortune. It's a big victory for Deborah Simon, one of Melvin's children from a previous marriage, who had argued Bren is unfit to serve as trustee.
"The record herein is replete with examples of conduct by Bren Simon justifying her removal in both capacities," Hughes wrote in the order entered Dec. 15.
The judge cited Bren's decision to distribute $13 million from the estate to herself without notifying other trust beneficiaries, a move she later tried to recast as a loan, albeit one without an interest rate or repayment schedule. Among Bren's other questionable decisions: Paying her attorneys more than $3 million from the estate without the court's approval, and moving to convert more than $600 million ownership units in Simon Property Group Inc. without appropriate professional advice, the judge wrote.
Hughes appointed former Indiana Supreme Court Justice Theodore R. Boehm, who retired earlier this year, to replace Bren as both trustee and Melvin's personal representative. The judge chose an outsider because "successor personal representatives" noted in Melvin's will, including his son and Simon Property Group CEO David Simon, are either named parties or witnesses in the pending will contest.
Hughes ordered Bren to immediately deliver all records pertaining to the estate to Boehm, and to provide a full accounting of her activities as interim trustee within 60 days.
Deborah's legal team argued in July that Bren is unfit to serve as trustee, saying that she is hostile toward her stepchildren and already had bungled several important decisions.
They played snippets of videotaped testimony from Bren, taken in March, in which she describes Deborah and her siblings Cynthia Simon-Skjodt and David Simon, the chairman and CEO of Indianapolis-based Simon Property Group, as spoiled, vicious and hurtful. In e-mails entered into the court record, Bren calls Deborah "bin Laden" and describes the actions of David as "terrorism." (Snippets of Simon's video deposition, including comments she made about her strained relationship with her stepchildren, appear in the videos below.)
Attorneys for Bren argued she served capably as executor and trustee of the estate of her late husband, pointing to a series of moves she has signed off on, including the transfer of her husband's stake in the Indiana Pacers and moves to appraise the value of a vast array of holdings.
Bren's attorneys are trying remove Hughes from the case, after taking issue in November with the judge’s choice of personal counsel to represent him in front of a state judicial commission. Hughes hired two attorneys with Bingham McHale after he was charged with driving while intoxicated in North Carolina in October. A different attorney at the same firm represents Simon Property Group.
Hughes replaced the Bingham McHale attorneys on Nov. 22, three days after Bren’s attorneys objected and asked for a stay in the case. Hughes said he has “no bias” for any party or attorney in the case, but Bren’s attorneys were not convinced. The judge on Wednesday certified the appeal, fast-tracking a review by another judge.
Deborah claims Bren coerced Melvin to make changes to his estate plan in February 2009, seven months before he died at age 82. Deborah contends Melvin was suffering from dementia and didn’t understand what he was doing when he signed off on the plan, which boosted the share of his fortune going directly to Bren from one-third to one-half.
The changes also wiped out a portion that was to go to Deborah and her two siblings from Simon’s first marriage—Cynthia Simon-Skjodt and David Simon.
Bren has claimed in court filings that the changes to the will reflected Melvin’s desire to compensate her for a drop in the company’s stock price and a reduction in the cash dividend.