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Settlement ends bitter battle over Mel Simon estate

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A bitter battle over the $2 billion estate of the late shopping mall tycoon Melvin Simon has ended with a confidential settlement.

Hamilton County Superior Court Judge William J. Hughes signed off on the agreement following a hearing Wednesday morning attended by sisters Deborah Simon and Cynthia Simon-Skjodt. They had objected to changes to their father's will that gave stepmother Bren Simon a larger chunk of the estate after Melvin died in 2009.

The judge agreed to close the hearing and accept the settlement under seal because some of the financial terms involve the estate's holdings in publicly traded Simon Property Group Inc. All of the principals in the case had to sign off on the deal, as did not-for-profit organizations, including Indiana University, that are set to receive charitable gifts from the estate.

An IBJ reporter attending Wednesday's hearing was asked to leave shortly after it began around 10:45 a.m. Closed hearing are unusual in estate cases, and the newspaper registered its objection.

An attorney for trustee Theodore R. Boehm, the former Indiana Supreme Court justice, requested the hearing be closed, and none of the other parties objected.

Cynthia Simon-Skjodt declined to discuss the agreement but said she's "glad it's over" as she stepped onto a courthouse elevator with Deborah Simon, the plaintiff in the case. After the elevator doors closed, one of them let out a loud "Yeah!"

Attorneys for Bren Simon, who did not attend the hearing, declined to comment.

The judge's order accepting the settlement describes the resolution as "just and reasonable." It also notes that the agreement marks an end to bi-weekly estate distributions of $125,000 to Bren Simon.

There have been suggestions in court records that a settlement was near, particularly after attorneys for both sides agreed in October to vacate a scheduled July 2013 trial date and put discovery on hold, a development IBJ reported in November.

The largest argument in favor of a settlement: The fortune they’re fighting over has swelled in size since the legal battle began in January 2010, four months after Melvin died at 82.

The co-founder of Simon Property Group Ieft an estate worth about $2 billion. His principal holding was Simon Property stock, which was a good investment during his lifetime and has only gotten better since. Simon shares now fetch $156 apiece, more than double where they were when his daughter Deborah filed to contest the will.

Deborah is one of Melvin’s children from his first marriage. The other surviving children from that marriage are Cynthia Simon-Skjodt and David Simon, chairman and CEO of Simon Property Group. She and her siblings contend Mel was suffering from dementia and didn’t understand what he was doing when he revised his estate plan in February 2009, boosting 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 directly to the children and left charitable gifts stipulated in prior versions to Bren’s discretion.

Bren, 69, who was married to Mel for 37 years, contends the changes fully reflected his wishes. She said Mel wanted to compensate her for the negative impact of the financial crisis, which had knocked Simon shares into the $40 range and caused the board to sharply reduce the cash dividend.

The court fight has exposed deep division between Mel’s children and their stepmother. In one e-mail quoted in court, Bren said of the three: “I hope they rot in hell.” Bren also gave an emotional deposition, in which she said her stepchildren have been “cruel, insensitive and hurtful on a fairly regular basis” since she joined the family. (Watch portions here.)

Hefty attorney’s fees typically give parties a strong incentive to settle and halt the bleeding, but the Mel Simon estate is so large that the many millions of dollars in fees represent barely more than a rounding error.

Still, the rising value of Mel’s estate made it possible for a deal both sides could embrace as a victory. The template was the resolution in the fall of a side dispute with Simon Property Group, which had blocked Bren’s attempt in early 2010 to cash in Simon holdings held by a Mel Simon trust.

The settlement allowed the sale to go forward, with the estate reaping $944 million—far more than the original transaction would have generated but a $100 million discount to the market value at the moment of the conversion. A win-win.

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  • "Maybe Herb" comment response
    Do you know who Herb considers his "loved ones"? If you want to learn about pain, ask his 7 children from 3 mothers who he traded in like cars if their daddy has lived a life of integrity. If you think this was a battle and you like commenting on people you don't know, just wait until Herb passes. Then you can all have a field day. So stay right here. Don't look at your own lives or families and keep judging. Herb would be non existent w/o his genius brother Melvin handing his little bro "his billions" on a silver plater. Someday the true story will be told. We must not forget that before SPG, there was Melvin Simon and Associates. Mel's main associate in life was Bren. He wanted to hold her hand until the end. If she was so "bad", then why would a genius with everything, love her until his last moment? He made his own choices. She was the only one who loved and took care of him for all of his days. She was never a waitress or whatever others say. She was a co manager at Stouffer's in Indy and worked for Gov. Rockafeller when they met. The "tribe" in Indy can be very exclusionary. The real insiders know that Mel and Bren had one of the all time great love affairs. They were all greedy. It comes with the territory. Indy is Simonized. You all live in that cult.
  • Plebe
    Did any of you live in Bren's shoes? Who are you people to make stupid remarks about others that you really do not know? Do you hate people who worked their entire lives for what they have? Have you lived in the Simon's home....any of them. If not ... take care of your own life. As Mel would say, "GET A JOB". Then you won't have to tear other people down because you'll be busy living.
  • It's BRENDA
    Brenda changed her name to Bren changed when she moved in with Mel. Prior to the Stoffers job she was a cocktail waitress in Little Rock, AK. Same job in Dallas. Brenda didn't sound snobby enough her hence Bren.
    • A little addition
      Great summary of Bren's history. Just wanted to add that her chance encounter happened when Mel was married to the mother of the children mentioned above. The mother who he divorced to marry Bren. And she wonders why she wasn't welcomed with open arms by his children.....
      • Bren did well.
        From her first chance encounter with Mel when she was the cigarette girl at Stouffer's Hotel on Meridian (across from the Marrott: now Ivy Tech) Bren did very well. She's lived a lavish lifestyle with her summer home being the former Vanderbilt mansion in Palm Beach. Everyone could see this coming. An Indianapolis fairy tale life...not unlike the Tomisue Hilbert story.
        • Pickled Brain
          I fully expect my old dad to leave all his assets to his third wife. The mere fact that he married his third wife in the first place, and has stayed married to her, supports my belief that Agent Orange pickled his brain during his long ago adventures in SE Asia.
        • Agree
          May Herb see this as a reason to review his legacy to those he loves and to institutions he wishes to support.
          • Amazing
            Oh to be the attorneys in this case!!
          • trust funds
            Mel could have set up trust funds for his children BEFORE he married Bren. After he married her he could have arranged safety deposit boxes of cash for his children. He didn't use very good judgement in his estate planning. Rich guys do this everyday. Get excited about a new partner. Logic goes out the window. Financial greed brings out the worst in people.
            • SIMON settlement
              FYI

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