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Settlement ends bitter battle over Mel Simon estate

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A bitter battle over the $2 billion estate of the late shopping mall tycoon Melvin Simon has ended with a confidential settlement.

Hamilton County Superior Judge William J. Hughes signed off on the agreement following a hearing Wednesday morning attended by daughters Deborah Simon and Cynthia Simon-Skjodt. They had objected to changes to their father's will that gave stepmother Bren Simon a larger chunk of the estate after Melvin died in 2009.

The judge agreed to close the hearing and accept the settlement under seal because some of the financial terms involve the estate's holdings in publicly traded Simon Property Group Inc. All of the principals in the case had to to sign off on the deal, as did not-for-profit organizations, including Indiana University, that are set to receive charitable gifts from the estate.

An IBJ reporter attending Wednesday's hearing was asked to leave shortly after it began around 10:45 a.m. Closed hearing are unusual in estate cases, and the newspaper registered its objection.

An attorney for trustee Theodore R. Boehm, the former Indiana Supreme Court justice, requested the hearing be closed, and none of the other parties objected. The court in January is expected to consider an IBJ request to make all or part of the settlement public.

Cynthia Simon-Skjodt declined to discuss the agreement but said she's "glad it's over" as she stepped onto a courthouse elevator with Deborah Simon, the plaintiff in the case. After the elevator doors closed, one of them let out a loud "Yeah!"

Attorneys for Bren Simon, who did not attend the hearing, declined to comment.

The judge's order accepting the settlement describes the resolution as "just and reasonable." It also notes that the agreement marks an end to bi-weekly estate distributions of $125,000 to Bren Simon.

There have been suggestions in court records that a settlement was near, particularly after attorneys for both sides agreed in October to vacate a scheduled July 2013 trial date and put discovery on hold, a development IBJ reported in November.

The largest argument in favor of a settlement: The fortune they’re fighting over has swelled in size since the legal battle began in January 2010, four months after Melvin died at 82.

The co-founder of Simon Property Group Ieft an estate worth about $2 billion. His principal holding was Simon Property stock, which was a good investment during his lifetime and has only gotten better since. Simon shares now fetch $156 apiece, more than double where they were when his daughter Deborah filed to contest the will.

Deborah is one of Melvin’s children from his first marriage. The other surviving children from that marriage are Cynthia Simon-Skjodt and David Simon, chairman and CEO of Simon Property Group. She and her siblings contend Mel was suffering from dementia and didn’t understand what he was doing when he revised his estate plan in February 2009, boosting the share of his fortune going directly to Bren from one-third to one-half.

The changes also wiped out a portion that was to go directly to the children and left charitable gifts stipulated in prior versions to Bren’s discretion.

Bren, 69, who was married to Mel for 37 years, contends the changes fully reflected his wishes. She said Mel wanted to compensate her for the negative impact of the financial crisis, which had knocked Simon shares into the $40 range and caused the board to sharply reduce the cash dividend.

The court fight has exposed deep division between Mel’s children and their stepmother. In one email quoted in court, Bren said of the three: “I hope they rot in hell.” Bren also gave an emotional deposition, in which she said her stepchildren have been “cruel, insensitive and hurtful on a fairly regular basis” since she joined the family.

Hefty attorney fees typically give parties a strong incentive to settle and halt the bleeding, but the Mel Simon estate is so large that the many millions of dollars in fees represent barely more than a rounding error.

Still, the rising value of Mel’s estate made it possible for a deal both sides could embrace as a victory. The template was the resolution in the fall of a side dispute with Simon Property Group, which had blocked Bren’s attempt in early 2010 to cash in Simon holdings held by a Mel Simon trust.

The settlement allowed the sale to go forward, with the estate reaping $944 million — far more than the original transaction would have generated but a $100 million discount to the market value at the moment of the conversion. A win-win.

The IBJ is a sister publication of Indiana Lawyer.

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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