Estate spat entangles real-estate projects
A family dispute over the estate of a well-known heart surgeon and developer in
Three of his four sons-Steve,
The estate has varying levels of ownership interest and voting rights in five companies, giving it some control over the long-anticipated development called The Farm near
But since September, the family has been fighting in court over how to proceed with the properties and projects.
All five children-Steve, Mark and Chad plus a daughter,
Kelton is challenging the compensation that the representatives-two of her brothers and Rasor-are receiving for executing the estate and controlling its developments and investments.
"It could end up being a big mess, but then again, it might not be," Dible said. "It is hard to speculate accurately."
He said it's common for estate representatives to request permission to continue operating the related businesses and state law requires the executors to show there's an advantage to the business to do so. If the business in question involves a lot of risk, that could be harder to prove.
"In a lot of cases, there isn't a lot of controversy," Dible said.
Larger estates that require filing federal estate tax returns are usually open longer, along with estates that have interest in more than one company. Pittman's
"Anytime an estate has more than one closely held business, it instantly complicates things," Dible said.
Development decisions
Kelton has requested that the court approve any actions involving debt, transactions between Pittman entities and estate executors or beneficiaries, distribution of the estate's interest in Pittman entities and the sale of interests held by the estate.
She has also asked for quarterly financial statements from the estate executors.
Most of her complaint involves The Farm project and what she considers to be
Court documents allege that
The petition filed by Kelton also says
Attorneys
Kelton further accuses
The Farm could include 150,000 square feet of retail and office space, 400 multifamily units and several high-end estate homes. The development sits on the prominent southwest corner of
Kelton alleges that the family wanted to transfer money only as needed for the project-instead of in lump sums as it has been doing-and has yet to receive a detailed budget. She also claims
"There has been a long-standing problem with family members not following policies and procedures," Kelton's complaint states.
Slow progress
"
Kelton also said in court documents that she'd like to explore using other developers for The Farm, instead of
"We do not believe this project will be adversely affected by any disputes within the Pittman family,"
In addition to the
To cover the deficits,
Kelton is opposed to the loan, and alleges that no budget has been provided and there's no plan for repayment. She has requested that the court approve any significant decisions made by JEC.
"Kelton understands the need for flexibility and authority to operate a business in the ordinary course, such as managing leases for commercial real estate with retail business," her objection reads. "However, obtaining a million dollar loan and borrowing against solvent entities is not an action taken in the ordinary course of managing the day to day operation of the businesses."
The Bridges-which includes a
"Despite the legal disputes and financial issues within the Pittman family, we remain committed to developing firstclass projects at The Bridges in
Other loose ends
The estate also has 50 percent ownership in property at
The latter property, known as "The Cabin," includes a log cabin, private pond and "extensive entertainment facilities," according to
The Cabin is owned by another Pittman family company,
According to court documents,
But Kelton said in her petition that "the effect of such an imprecise, preclusive restriction would very likely have a dramatic, negative effect on the value of the cabin."
The family's ability to move forward with either property sale will depend on the outcome of the
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