Tom Benson’s lawyers were back in court on Tuesday, this time to argue that a federal lawsuit the billionaire filed related to several trusts set up for the benefit of his now-estranged daughter and grandchildren should be heard in New Orleans. The head of those trusts argued that New Orleans isn’t the right jurisdiction.
A half-hour of oral arguments ended inconclusively, with the federal judge taking the case under advisement.
Ever since he cut his daughter, Renee Benson, and her children, Rita and Ryan LeBlanc, out of his business affairs late last year, Benson has been seeking to remove several assets from the trusts, including non-voting shares in his Saints and Pelicans sports franchises. To do that, Benson will have to replace those assets with others of equal value.
But no swap has happened yet.
Trustee Bobby Rosenthal rebuffed a proposal from Benson in late February to replace the assets with about a half-billion dollars in secured promissory notes, real estate and the cancellation of $94.5 million worth of debt. Rosenthal said he could not sign off on that kind of transaction until Benson provided an updated valuation of the trust’s assets, which had not been completed at the time.
In March, Benson sued Rosenthal in New Orleans federal court. His suit essentially asks U.S. District Judge Jane Triche Milazzo to force Rosenthal to let Benson execute the asset swap.
Rosenthal, a Texas lawyer, subsequently challenged whether the New Orleans court had jurisdiction over the dispute.
On Tuesday, Benson lawyer Phillip Wittmann argued that the case should proceed in New Orleans because the assets that Rosenthal manages include noncontrolling ownership shares in the Saints. He also said Rosenthal attended a series of meetings in New Orleans in 2013 and 2014 with Renee, Rita and Ryan, before Benson fired them from his businesses and declared that his wife Gayle would take over as owner of the teams after his death.
Rosenthal’s lawyer, Kyle Schonekas, countered that the trusts at the center of the lawsuit were created in Texas, where Rosenthal, Renee, Rita and Ryan all live or have lived.
Further, Schonekas pointed out, the trusts own shares in companies founded in Texas, among them Benson Football LLC, which holds the Saints. The trusts also contain shares in companies that own car dealerships in Texas.
Schonekas and Wittmann would not predict when Milazzo might make a decision.
The litigation pitting Rosenthal against the 87-year-old billionaire is one of multiple fronts in the ongoing Benson family feud.
The rift became public in January after Benson fired Renee and her children and announced he no longer wanted them to have anything to do with the various businesses he owns in Louisiana and Texas or to inherit the businesses upon his death.
Benson can’t fulfill his goal unless he gets clearance for the asset swap he’s proposed to Rosenthal.
After Benson severed ties with his daughter and grandchildren, they filed a lawsuit in Orleans Parish Civil District Court seeking to have him declared mentally incompetent to make his own business decisions. A trial was held this month and a ruling is expected this week from Judge Kern Reese.
Renee also filed a lawsuit in Texas seeking to have her father permanently removed as steward of a trust set up for her benefit by her mother, who died in 1980. The lawsuit is pending, but Benson has been temporarily suspended from overseeing that trust.
That trust is separate from the ones involved in the lawsuit against Rosenthal. It doesn’t contain any shares in the Saints or Pelicans.
Rosenthal isn’t the only defendant in the federal lawsuit Benson is pursuing in New Orleans.
Texas lawyer Mary Rowe became a co-defendant in the case in April after agreeing to oversee some of the trusts involved in the case. However, it does not appear that a lawyer representing Rowe has enrolled in the case yet.
Overseeing trusts the size of those in Benson’s family can be lucrative work.
Wittmann on Tuesday remarked that Rosenthal has been earning about $25,000 a month for his services, though Schonekas said his client turns much of that money over to the San Antonio law firm where he works.
Meanwhile, two men temporarily overseeing the trust Benson was suspended from stewarding each earn $600 an hour for any work they do.