The
Miami Herald
Inherit The Whirlwind
Previous Deal With Son Set In Motion Challenges
To Millionaire Posner's Will
Mimi Whitefield and Elaine Walker
Miami Herald
The
seeds of the battle over Victor Posner's estate
were planted when the late tycoon and corporate
raider agreed to settle a lawsuit with his son Steven,
who claimed his father had cheated him out of millions
of dollars in trust payments.
Steven
and his father had been battling for more than a
decade. In a gesture befitting Posner's brash business
style, they agreed to divvy up the assets to be
included in Steven's settlement by tossing a golden
dollar coin before a Miami-Dade Circuit judge.
The
younger Posner won the toss and chose the first
property from the portfolio of Security Management
Corp., Posner's main holding company. He selected
a 71 percent interest in a 9.8-acre tract in Hallandale
Beach.
Victor
picked next and so it continued until seven properties
had been chosen by Steven. Though terms of the settlement,
which was signed in the spring of 2001, weren't
made public, sources say they netted Steven real-estate
holdings worth an estimated $100 million.
In
exchange, Steven gave up any future claim on Posner's
estate. ''He's quite satisfied,'' said his lawyer,
Harris Buchbinder.
NEW
WILL
That
agreement, however, set off a chain of events culminating
in a new will signed on June 28, 2001, and filed
with the court Feb. 11 -- just hours after Posner
succumbed to pneumonia at the age of 83.
It
named Posner's business associate and former girlfriend,
Brenda Nestor Castellano, his chief beneficiary,
while leaving nothing to three of Posner's four
children or any of his grandchildren.
The
new will didn't go over well with some of the Posner
relatives. Steven's twin sister, Gail, and Posner's
former attorney Marty Rosen quickly sued, claiming
Nestor exerted undue influence over a weak and befuddled
Posner when he signed the new will. Instead, they
claimed the court should recognize the 1996 will
that Rosen drafted.
Last
week they agreed to a settlement with Nestor, who
is married to Bobby Castellano but uses Nestor as
her business name. Terms of that settlement were
sealed by the court.
But
Steven Posner's three adult children -- Jarrett
Posner, Sean Posner and Dr. Kelly Posner-Gerstenhaber
-- continue their quest to have the 2001 will thrown
out.
''It's
about justice and doing the right thing,'' Posner-Gerstenhaber
said. ``It's not about money.''
But
it's clear that a great deal of money has always
been at stake when it comes to Victor Posner. His
immediate family is provided for in more than a
dozen trusts that are worth as much or more than
the probate estate, estimated at over $195 million.
''The
will was only one component to transfer wealth to
his family,'' friends and business associates, said
Tom Schultz, one of Nestor's attorneys.
LEGAL
BATTLES
Through
the years, the trusts have been the source of much
hard-fought litigation, and the weeks after Steven's
settlement were tumultuous ones for Victor Posner
and his business empire:
Shortly after the settlement, Rosen -- who did corporate
and tax work for Posner and set up trusts for the
Posner family -- met with attorney Milton Ferrell
in an attempt to reach a similar settlement on Gail
Posner's behalf.
But
Rosen claims the discussions never got far because
Ferrell, Schultz's partner and now attorney for
the Posner estate, wanted Gail Posner to agree to
a settlement similar to the one her brother had
received.
However,
under the 1996 will Gail would have been the chief
beneficiary of her father's estate. Since Steven
got nothing in the 1996 will, Rosen felt she was
entitled to more.
''We
were conciliatory if there was a reasonable offer
on the table, but that was not an acceptable offer,''
Rosen said. "Only a fool would have agreed
to the same deal that Steven had. Gail was entitled
to far more then Steven based on the will and the
trusts.''
Under
the 1996 will, Gail got all her father's personal
effects, including clothing, jewelry and automobiles,
as well as the house where she lives on Sunset Island
in Miami Beach and Victor's Golden Beach house.
In
addition, it provided $100 million and all Posner's
voting shares in Security Management Corp. to be
held by his trustees for Gail Posner. She was to
receive a minimum of $8 million a year.
The
lawyers talked on and off for much of 2001, but
they still hadn't reached a settlement for Gail.
Around the spring of 2001, three of Posner's long-time
attorneys were fired.
Rosen,
Cliff Steele and Mark Dopkin, a Baltimore attorney
and Posner's second cousin, didn't see it coming.
For years all three had been considered part of
Posner's inner-circle of business associates. Steele
was the least tenured of the group, working almost
14 years for Posner, while the other two had been
advising Posner for between 30 and 40 years.
They
all claim they were canned by Nestor, although Ferrell
and Nestor say it was Posner who decided to give
them the boot.
A June 6, 2001, letter sent to Rosen and signed
by Posner stated that since Rosen had officially
undertaken the representation of Gail Posner in
the settlement negotiations, ``I believe it is inappropriate
for you, your law firm, or your accounting firm
to continue to represent me.''
DIRECTORS
MEETING
On June 14, 2001, a notice was issued for a special
meeting of Security Management Corp., the first
time in years directors had been summoned for such
a gathering. The purpose: to elect a board of directors.
Rosen says it was called within 24 hours of the
last meeting he had with Ferrell and Schultz to
discuss a settlement for Gail and that its obvious
purpose was to vote her off the board.
When the meeting was held on June 25, 2001, Posner
didn't appear nor was he in touch by phone. Instead,
he authorized his brother-in-law Melvin Colvin,
through a written proxy, to vote his personal stock
and the stock held by the 12/1/60 Victor Posner
Trust. It was unusual behavior for the always-controlling
Posner.
At
the meeting, Rosen complained about the timing of
the gathering and the allegedly unjustified salaries
and benefits paid to the officers and directors
of Security Management. He said Gail Posner deserved
her board seat since she owned nearly 37 percent
of the company.
But
Rosen's pleas went unheard. When the votes were
tallied, Gail was no longer an SMC board member.
The new board consisted of Colvin, Nestor and Victor
Posner.
Three days later -- on June 28, 2001 -- the new
Posner will was executed. Ferrell says he drafted
it at Posner's request and it revoked the 1996 will.
Now
with the settlement reached last week, neither Rosen
nor Gail Posner are contesting the 2001 will. However,
the grandchildren will continue their litigation
despite their aunt's settlement.
''We're
not disappearing,'' said Holly Skolnick, the Greenberg
Traurig attorney representing the grandchildren,
who were each left $250,000 under the 1996 will.
She
claims that if the grandchildren's lawsuit is successful,
it would jeopardize the settlement that Gail Posner,
Nestor and Rosen agreed upon. ''The settlement is
based on the validity of the 2001 will, which we
firmly believe is invalid,'' Skolnick said.
However,
Steven Marks, the attorney for Gail Posner and Rosen,
contends the grandchildren's suit has no impact
on the settlement.
The
three grandchildren aren't the only Posner relatives
still fighting over the remains of Posner's empire.
Disputes regarding the beneficiaries of the trusts
also are ongoing.
Prior
to Victor Posner's death, some of the trusts benefiting
Gail Posner were changed to make her stepbrother,
Troy Posner, and the daughter of her stepsister,
Tracy Posner Ward, the beneficiaries.
''It's
not over,'' said Buchbinder, who also represents
Tracy Posner Ward on trust issues. "There's
definitely more that's going to happen.''