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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowSimon Property Group Inc. is suing Bren Simon, the widow of company founder Melvin Simon, over her effort to convert part
of her late husband’s ownership stake in the publicly traded mall giant into common shares or cash.
The suit, filed
this morning in Hamilton Superior Court, adds another layer to what is shaping up as a nasty battle over a fortune that could
be worth $2 billion.
Bren Simon notified Simon Property Group on Jan. 12 that she was electing to convert 6.5 million
so-called partnership units held by her late husband into common shares or cash, at the company’s discretion. The units are
worth about $460 million based on recent trading in the company’s shares.
But the company said it could not convert
the partnership units because of a legal
challenge to Melvin Simon’s will, filed by daughter Deborah Simon in Hamilton County
on Jan. 7.
"It would appear that the pending litigation constitutes a lien, which would not permit a conversion
of the subject partnership at this time," Simon General Counsel James M. Barkley wrote Jan. 19.
Attorneys
for Bren Simon fired back on Jan. 21, threatening to pull Simon Property Group into the legal fight.
"Your position
is untenable and has already caused our client damage," attorney Michael V. Ciresi with Minneapolis-based Robins
Kaplan Miller & Ciresi wrote. "In short, it is evident that you and SPG are in breach of the agreement through your
refusal and that you appear to be colluding with others which could lead to additional contractual and tort claims."
Simon
Property Group’s CEO and chairman is Deborah’s brother, David. The company said in its lawsuit that it does not want to "insert" itself
into the litigation over Melvin Simon’s will or to delay a legal conversion of his
partnership units, so it is asking a judge to settle the dispute.
Deborah
Simon said in her suit that Melvin was suffering from dementia and even needed help signing his name
when he made changes sought by Bren Simon in February 2009.
Bren said in a
response filed
Jan. 20 that the changes reflected Melvin’s desire to compensate her for a drop in the company’s
stock price and a reduction in the cash dividend. It acknowledges he needed help with his signature
but attributed that to "Parkinsonian symptoms" affecting his right hand.
The revised
estate plan boosted the share of Melvin’s fortune going directly to Bren from one-third to one-half. It also
wiped out a share that was to go to Melvin’s three children from his first marriage—Deborah, David Simon and Cynthia
Simon-Skjodt—and leaves charitable giving to Bren’s discretion.
The prior plan specifically earmarked
one-third of the estate for charity.
Bren contends in court papers that David Simon and Cynthia Simon-Skjodt are
supporting Deborah’s suit. She is asking the court to add them as plaintiffs "to reflect the true parties responsible
for instituting this proceeding.”
Melvin Simon, who died Sept. 16 at age 82, co-founded
Simon Property Group and was one of Indiana’s richest men.
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