After several days of watching his family’s infighting transfix New Orleans in a way that only his football team typically can, Tom Benson has substantially increased the amount he is offering to place in a group of trusts set up for his now-jilted daughter and two grandchildren, in return for removing from those trusts the Saints and Pelicans franchises that he recently decided to leave to his wife, Gayle, after his death.
Benson’s lawyers also said for the first time this week that the entirety of the teams do not reside in those trusts.
Attorney Paul Cordes said the various trusts contain 95 percent of the shares of Benson Basketball, the holding company for the Pelicans of the NBA. The trusts also contain 60 percent of the shares of Benson Football, the holding company for the NFL’s Saints. The remaining shares are held by Tom Benson, who controls all of the voting shares in both companies.
Holders of nonvoting shares typically have little or no voice on corporate matters. Such shares are usually granted to individuals who are willing to invest in the company’s profitability and success without receiving voting rights in the company’s direction.
“The point is that (his daughter Renee Benson and her children, Rita and Ryan LeBlanc) own fractions of the team,” Cordes said. “The trusts own fractions of the team.”
Benson tried Jan. 12 to pull the teams and other assets from the trusts in exchange for an unsecured promissory note worth $427 million, according to a lawsuit filed by the trio seeking to have the family’s 87-year-old patriarch declared mentally unfit to handle his business affairs. It was unclear from the suit what other assets Benson pledged.
At least seven trusts were created in 2009 and 2012 to protect Benson’s heirs from having to pay estate taxes on their inheritances. They are irrevocable — meaning, for instance, that Benson cannot add or remove beneficiaries. He is allowed, however, to remove assets from the trust, provided he replaces them with other assets of equal value.
Benson’s initial proposal was blocked by Bobby Rosenthal, a lawyer in San Antonio who serves as trustee for all of the trusts, because it was deemed an unequal trade.
Benson’s new offer, made Saturday, proposes swapping out the trusts’ ownership shares in the teams and some other assets for secured promissory notes totaling about $449 million, Cordes said. Serving as collateral: the teams themselves, and Zelia LLC and Bensco Inc. — holding companies for Champions Square, Benson Tower and Benson’s five car dealerships.
Benson also is offering to forgive loans he made to the trust in recent years and is throwing in a 50 percent stake in a couple of thousand acres he owns in Texas, plus full ownership of a house on the property, Cordes said. The ranch was included in the Jan. 12 request, he said.
Kevin Kennedy, an attorney for Rosenthal, confirmed that he had received the revised proposal for the exchange.
“He is evaluating the proposal consistent with his duties as trustee of the trusts,” Kennedy said in an email.
Experts are currently appraising the teams and the other holdings, as well as the assets being proposed to replace them, and Cordes believes the new offer is close to a fair trade. The promissory note will be adjusted, if necessary, once the appraisals are complete, he said.
“That’s a pretty good ballpark range it’ll be in,” Cordes said. “It might be a little more, could be a little less.”
The Saints and Pelicans on Thursday would not disclose who was hired to appraise the teams.
The lawsuit filed by the spurned heirs said Benson proposed valuing the teams as follows: $63.5 million for the Pelicans and $351.4 million for the Saints. Forbes magazine recently put the two teams’ value far higher: $650 million and $1.1 billion, respectively, the filing notes.
Cordes said he didn’t know what the teams would fetch if they were sold.
“We’re having the best and the brightest in the industry value what we have to replace,” Cordes said. “When those valuations come in, I can assure you they’ll be more accurate and precise and based on hard, real data, more so than what you read in the newspaper, and we’ll be prepared to defend those values.”
Benson’s lawyers also said this week that Benson began working with them in early December to alter the old succession plan that upon his death would have let Renee, Rita and Ryan inherit his sports teams and other family businesses.
Benson has assured an executive leadership team headed by Saints and Pelicans President Dennis Lauscha and Saints General Manager Mickey Loomis that they would remain in place after his death.
“It took us a few weeks to get everything kind of laid out for Mr. Benson,” Cordes said. “And then he pulled the trigger.”
By that, Cordes was referring to a Dec. 27 letter signed by Benson that was sent via email to Renee, Rita and Ryan, informing them that they were forbidden from speaking to him or showing up at any of his businesses.
Since then, in a media statement, the family has said they doubt Benson actually sent the letter two days after Christmas, in an oversized font and without any letterhead.
But Cordes said he saw Benson sign the letter, which was prepared at the Saints and Pelicans owner’s mansion in Uptown New Orleans. Before instructing an assistant to send it to Rita, Renee and Ryan, Benson had it looked over by Stanley Rosenberg, his longtime lawyer in San Antonio.
“This was not something that was done hastily, on the spur of the moment,” lawyer Phillip Wittmann said. “This is something Mr. Benson had been considering for a while.”
Led by attorney Randy Smith, Rita, Ryan and Renee’s legal team claims Benson has been unduly influenced to cut out his relatives while in a weakened mental and physical state. One of their arguments in court documents is that Benson is not mentally fit enough to make his own business decisions, which they say should instead be made by Renee in part because she is his next of kin.
Benson’s lawyers counter that the final say on decisions regarding his franchises and other properties is his alone, and Cordes repeatedly mentioned that his client has never ceded to anyone a single voting share of his business empire.
Benson’s lawyers also allege that Rita, Ryan and Renee do not have proof to back up their allegations about his mental state. In fact, Wittmann said, he and his associates have recorded videos of Benson’s execution of the documents related to the new succession plan to protect him from accusations that he was doing so under duress or in a confused state.
In a brief interview Wednesday night with Fox Sports New Orleans, during a Pelicans game, Benson said, “There is nothing wrong with me. ... I feel fine.”
Separately, a statement released by the Saints on Thursday evening and attributed to Dawn Benson Jones, a little-known granddaughter of Benson, said she supports her grandfather and is “brokenhearted” by the family dispute.
“I have remained silent over the past week in hopes that the conflict would be resolved quickly and quietly once other family members saw the irreparable damage that was being done by their actions,” Jones said in the statement. “It has become apparent over the last few days that they have no intention of stopping their relentless attacks, so at this time I would like to publicly state my support for my grandfather, Tom Benson.”
Jones is the daughter of Benson’s only son, Robert Carter Benson, who died of cancer in 1985. She lives near Austin, Texas, with her husband and four children and has not had any part of running the Benson empire.
In the statement, Jones said she has a “great relationship” with Benson and his wife.
“I have witnessed nothing that warrants the actions that are currently being (taken),” she said. “I am brokenhearted that other family members have chosen to publicly harass and humiliate the patriarch of our family — the very person who is responsible for giving them everything they have.”
Note: This story originally incorrectly said Tom Benson owned Fox Sports New Orleans. He does not — he owns the local Fox affiliate. The story has been corrected.