Just over a year has passed since paper and packaging billionaire Richard Pratt passed away, but his ability to generate headlines has not faded.
Last week it emerged that Pratt’s former mistress, Shari Lea Hitchcock, with whom Pratt had a daughter named Paula, launched legal action in the New South Wales Supreme Court to contest Pratt’s will.
The claim is in its very early stages and will return to court in July. The Pratt family, which is valued at more than $4 billion, has declined to comment.
The case has come as something of a surprise given Pratt had what appeared to be a clear and well-articulated succession plan that was put smoothly into place following his death in April 2009.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
Pratt’s son Anthony assumed the role of leader of the $4 billion Visy empire, which was then split between Jeanne and his three oldest children.
Pratt Industries USA went to Anthony. The family investment vehicle, Thorney Holdings, went to daughter Heloise and her husband, Alex Waislitz. Visy Industrial Packaging (now known as Pact Group) was taken over by daughter Fiona and her husband, Raphael Geminder. Each business was managed by its owners in the years before Pratt’s death.
Visy’s $3 billion Australian manufacturing group, which comprises the Visy Board, Visy Paper and Visy Recycling businesses, is owned in equal share by Jeanne and Pratt’s oldest children.
Pratt’s youngest daughter Paula was believed to have a Sydney mansion held in trust for her and was expected to receive a large cash payment in 2016, when she turns 18. Reports earlier this year suggested Paula would also receive more than $22 million in shares, while Hitchcock was given a Sydney apartment.
The succession plan may have been clear, but it seems not everyone agreed with it. The Pratt family, who prefer to keep their private affairs very private, will no doubt be hoping the claim can be quickly sorted out.
However, experience says that these sorts of cases can become very ugly.
While Pratt’s estate planning appeared to be quite thorough, many super wealthy entrepreneurs around the world – perhaps believing a little too much in their own immortality – fail to ensure their affairs are managed properly after their death.
The problems that lead to estate battles can be numerous, but the formula looks something like this: Money + multiple children, spouses and mistresses = a long, ugly and expensive legal fight.
Here are five of the biggest estate battles from around the world:
Gina Rinehart vs. Rose Porteous
This case is perhaps the most recent – and most ugly – example of an Australian billionaire estate spat. When iron ore baron Lang Hancock died in 1992, his daughter Gina Rinehart and his second wife Rose (she remarried soon after Lang’s death to Willie Porteous) launched an 11-year fight over his estate.
Porteous claimed she had been denied the valuable iron ore royalty rights Lang had owned after a last-minute change to his will, while Gina claimed $50 million worth of assets given to Rose had been handed over under duress. In 2003, the pair finally agreed to a truce, reaching a secret settlement that saw all legal actions dropped. Porteous kept her assets and Rinehart retained the iron ore royalties.
Chinachem Charitable Foundation vs. Tony Chan
Nina Wang, who died in April 2007, was known as one of Hong Kong’s richest women and also one of its most eccentric. However, it’s doubtful whether anything in her life could eclipse the saga that has erupted after her death. Following Wang’s death, Tony Chan, who the Times of London delightfully described as a “bartender-turned-machinery salesman-turned-feng shui master” emerged with what he said was a handwritten will that left most of Wang’s $US13 billion fortune to him. But the Chinachem Charitable Foundation contested the will, claiming Wang intended to leave her fortune to charity. After a colourful trial – during which the court heard claims that Chan morphed from Wang’s feng shui master into her secret lover – a court ruled Chan’s will was a fake.
Prince Jonathan vs. Princess Gesine
This $2 billion legal fight has it all. In the mid-1960s, Princess Orietta Pogson Doria Pamphilj, a descendant of Italy’s noble family, visited an orphanage in London and fell in love with a curly-haired young boy called Archibald, whom she promptly adopted and renamed Price Jonathan. A year later, she adopted a young girl and renamed her Princess Gesine. When Pricess Oreitta died in 2000, the two children inherited her 1,000-room palazzo in the centre of Rome, another in Genoa, 14 noble titles and one of the world’s greatest art collections, including works by Raphael, Titian and Caravaggio. But late last year, a legal battle began between the two siblings over the issue of their children. Prince Jonathan is homosexual and has two children by a surrogate mother. Pricess Gesine (who has four children of her own) launched legal action claiming Jonathan’s son and daughter are not technically his and therefore not legitimate. The case has yet to be resolved.
Simon vs. Simon
Billionaire shopping centre owner Melvin Simon died in September 2009, sparking a legal fight between his second wife of 37 years, Bren Simon, and the children from his first marriage. At issue was a change made to Simon’s will about seven months before his death, in which Bren’s share of the estate was greatly increased and his children left with very little. Simon’s children, led by daughter Deborah Simon, have claimed the will was signed under duress. What makes the case even more complex is that during the fateful will-changing meeting, Mel Simon’s hand was guided by his financial planner when he signed the new document, due to his frail state.The case is continuing.
The grandkids vs. the dog
When hotel tycoon Leona Helmsley died in 2007, she left part of her $US5 billion fortune to her brother, part to two of her four grandchildren and part to her Maltese dog Trouble, who received $12 million in trust to keep her in the manner to which she had become accustomed. You’d never believe it, but the two grandchildren who didn’t get any inheritance challenged Helmsley’s will, claiming the will was made under duress. A court settlement eventually cut Trouble’s inheritance to $2 million and gave $6 million to the grandkids. But that wasn’t the end of the legal battles over Helmsley’s estate – a number of dog charities later sued the estate, claiming the trustees weren’t giving the charities a big enough slice of the pie.