Estate of Howard Gilman, Deceased, Bernard D. Bergreen and Natalie Moody, Executors - Page 19

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          Bergreen’s and Moody’s power over HG, expenses relating to the              
          Gilman assets were estate expenses.  The estate also contends               
          that Bergreen and Moody acted primarily as executors in                     
          facilitating HG’s sale of Gilman assets, and that they did so to            
          benefit the estate.  We disagree.                                           
               Bergreen and Moody wore many hats:  they were executors of             
          the estate, managers of HG, and members of the board of directors           
          of the foundation.  As part of the restructuring, the estate                
          transferred GIC assets to HG and its subsidiaries.  As a result,            
          the GIC assets, including the Gilman businesses, ceased to be               
          estate assets, and Bergreen’s and Moody’s management services               
          related to those assets were performed for HG and its                       
          subsidiaries.  The transfer of assets from the estate to HG and             
          its subsidiaries severed the relationship the executors had with            
          the transferred assets in their capacity as executors.  Insofar             
          as Bergreen and Moody had the same duties and responsibilities as           
          managers of HG with respect to those assets as they had as                  
          executors, it does not follow that their actions for HG were                
          taken in their capacity as executors.  The estate claims both the           
          tax benefits resulting from transferring the Gilman assets to HG            
          and its subsidiaries (estimated by its tax advisers to be a tax             
          savings of $160 million), and all of the deductions that would              
          have been available to the estate if it had not transferred those           
          assets.  Using executors to run a commercial enterprise does not            

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Last modified: May 25, 2011