Heirs spar for exec's riches: Grandson of Lilly officer who died in '77 fights widow's trust

June 6, 2005

Robert E. Koffenberger joined Eli Lilly and Co. as a salesman in 1939. By the time he retired in 1974, he was one of the company's highest-level executives, a member of the board of directors-and an immensely wealthy man.

Now, 28 years after the Indianapolis executive's death, a fight over that fortune has split his grandchildren. One of the eight has launched a court fight here charging that his brother and sister-in-law took advantage of the cloudy mind of Koffenberger's widow, Marie, to win the bulk of a $12 million trust she set up eight years ago.

The plaintiff in the suit in Marion County Probate Court is Robert Trent, an airline pilot living in New Hampshire. By the time Mrs. Koffenberger set up the trust, he charges, she was a chronic alcoholic and showing early signs of Alzheimer's disease.

Ensnared in the fray and named as defendants are National City Bank of Indiana and Indianapolis attorney Tom Ewbank, best known as personal attorney for Ruth Lilly, great-granddaughter of the pharmaceutical firm's founder. National City is trustee for Mrs. Koffenberger's trust, and Ewbank, a partner with Krieg DeVault, drafted it.

In his lawsuit, Robert Trent contends Mrs. Koffenberger did not know what she was doing when she executed the trust on Thanksgiving eve 1997 at the Louisiana home of his brother and sister-in-law, James and Paula Trent.

Under the trust, James and Paula and their children received millions of dollars in distributions before Mrs. Koffenberger died in 2002 at age 84, court records say. The trust earmarked 75 percent of what remained for the couple, with the remaining 25 percent split between Robert Trent and his two half-sisters. It left the other four grandchildren empty-handed.

In contrast, Mrs. Koffenberger's husband had not played favorites in dividing up his fortune, most of it in Eli Lilly stock. Under his final will, he gave half his assets to his wife and put the other half in trust. Under the terms of that trust, the $6 million it contained was split evenly among the eight grandchildren when Mrs. Koffenberger died.

About $2.7 million remains in Mrs. Koffenberger's trust as a result of distributions, taxes and the swoon in recent years of Lilly stock. Those assets have been frozen since Robert Trent began challenging the validity of the trust in courts here and in Louisiana two years ago. In the litigation, he's also seeking to reverse the distributions that already occurred.

"It's incomprehensible to anyone that knew my grandmother that she would do anything that dramatically different from my grandfather's trust and will," Robert Trent said in a deposition taken in December.

"She worshiped the ground he walked on. We all knew that. And if he felt strongly enough at that time to dispose of his estate the way he did, my grandmother would have followed suit."

Nothing is amiss, countered Robert Hartley, a Locke Reynolds attorney representing James and Paula Trent.

By the time Mrs. Koffenberger set up the trust, Hartley said, she had overcome her problems with alcohol abuse and was fully aware what she was doing. It's no surprise she favored James and Paula Trent, he said, because she was living near them in Louisiana, and spending time with them.

"There was a lot of attending to. It was a daily, weekly taking care of her needs," Hartley said. "It was clear that for the last decade of her life, those were the people who were paying attention to her the most."

In contrast, the four grandchildren who got nothing-all children of a deceased son-had lost touch with her, Hartley said. Of the other four grandchildren-all children of a deceased daughter-Robert Trent saw Mrs. Koffenberger least, only a couple of times a year, he said.

"The only one who is really pursuing this is the one who was never around," Hartley said.

Path to the top

Like many of the other executives who ran Eli Lilly and Co. in the middle part of the 20th century, Robert E. Koffenberger was a career man, climbing his way from the lowest rungs of the company into the executive suite.

By the time he retired in 1974, he was serving as vice president of marketing development and planning, as well as vice president of public affairs and vice president of corporate development.

Koffenberger spent much of his early career on the road as a salesman, working to gain access to doctors in order to pitch Lilly products, E.J. Kahn wrote in his 1975 book, "All in a Century: The First 100 Years of Eli Lilly and Co."

In Maysville, Ky., Kahn wrote, Koffenberger "had a once-in-a-salesman's-lifetime experience. He was waiting in a doctor's office when the physician locked up and started off on his house calls.

"The Lilly man was flabbergasted when the physician, pointing out that it would give them a chance to chat about new products, invited him to go along on his rounds. ... It was the most protracted access to a physician's ear Koffenberger ever enjoyed."

Just three years after Koffenberger retired, he died from cancer in Sarasota, Fla. After that, Mrs. Koffenberger began drinking excessively, "which over time induced permanent alterations to her mental capacity," attorneys for Robert Trent charge in court papers.

When Mrs. Koffenberger was living in Cincinnati in the late 1980s, she was hospitalized for internal bleeding, "although the main goal was actually to detoxify her from a state of chronic alcohol dependency," according to a report prepared at the time by Dr. Richard Marnell. He wrote that Mrs. Koffenberger was "in complete and irrational denial of her state of alcoholism."

Soon after her release, Dr. Marnell wrote, her drinking appeared to accelerate and she was experiencing an alcoholinduced form of dementia. Without drastic action, he wrote, "the patient is very definitely committing legal suicide."

Clouded judgment?

Robert Trent recalled in his deposition seeing Mrs. Koffenberger drink scotch when he would visit her in the early 1990s, after she'd moved to Louisiana. He said he also noticed that she was beginning to mix up people and places.

However, Hartley, the attorney for James and Paula Trent, said that during the period other family members did not witness her drinking more than a glass or two of wine at one sitting, and they say she was showing no signs of alcohol impairment.

Mrs. Koffenberger began favoring James and Paula Trent in her estate planning in 1994, earmarking for them 60 percent of what remained after other distributions. She upped the percentage to 75 in 1996. The 1997 trust was the first document triggering payments to their family while she remained living.

In the litigation, Robert Trent is only able to challenge the 1997 estate plan. However, he believes all the plans Mrs. Koffenberger created in the 1990s ultimately should be tossed out, rolling back to a will providing equal bequests for all eight grandchildren, said Perry Staub, an attorney in Louisiana representing the plaintiff.

Staub said James, who runs an embroidery company in Louisiana, did not even tell his siblings that Mrs. Koffenberger had written new wills in '94 and '96 or created the 1997 trust. Throughout that period, James and Paula Trent "took unconscionable advantage" of Mrs. Koffenberger to enrich themselves, court papers charge.

Just two weeks before execution of the November 1997 trust, Dr. William Barfield of Louisiana examined Mrs. Koffenberger and found she was having "some difficulty with recent memory," court papers say.

The following March, Dr. Barfield made a preliminary diagnosis of Alzheimer's. Within months, court records say, doctors diagnosed her with advanced Alzheimer's complicated by long-term alcohol abuse.

Hartley, however, said a team of advisers, including Ewbank and National City trust officers, met with Mrs. Koffenberger in Indianapolis in August 1997 and did not see reason for concern.

"All of these people are very experienced in dealing with elderly clients and very alert to issues with clients passing the point where they are able to make decisions," Hartley said. "Nobody at that meeting detected any sign that Mrs. Koffenberger was not fully competent to make her financial decisions."

Ewbank is a former senior vice president of Merchants National Bank, which later became National City. While with the bank, he had overseen James Koffenberger's estate. In a court affidavit, he said he had "frequent and prolonged contact" with Mrs. Koffenberger about her estate planning from 1980 to 1998.

Ewbank declined to comment, and National City did not respond to requests for comment by IBJ's deadline. In court papers, attorneys for both deny all allegations-including that they exerted undue influence over her to win her business or should have deemed her impaired.

Fumbled formality?

Staub, the attorney for Robert Trent, also is attacking the trust on another front-that it was never valid because it was improperly executed.

According to court records, Mrs. Koffenberger's final will and trust arrived in Louisiana via overnight mail on Thanksgiving eve 1997. Ewbank included a cover letter asking Mrs. Koffenberger to show the will to a Louisiana estate-planning attorney to make sure it complied with that state's laws.

Court papers say Mrs. Koffenberger did not do that, and instead executed the documents over dinner that night. The notary public was Paula Trent's sister Dawn Wilkinson, who lacked the independence required of a notary, Robert Trent charges in court filings.

In addition, Wilkinson did not read, review or explain any of the terms of the documents, according to a deposition she gave in December 2003. The only witness was another interested party, Kathleen Wilkinson, Paula's and Dawn's mother.

Even so, the estate-planning documents are valid, Hartley said. The trust had to comply only with the law in Indiana, he said, where the requirements for execution are less stringent.
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