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Lawsuit seeks to block sale of Callaway Hills horses (UPDATED)




By BOB WATSON
News Tribune
- June 26, 2005

 

 

 

 

Jefferson City, Mo. - One of News Tribune owner Betty G. Weldon's three children is suing to stop a decision to sell many of the horses at Mrs. Weldon's Callaway Hills Stables.

The seven-member Weldon Holding Co. board voted 5-1 on May 31 to close the breeding operation at Callaway Hills Stables.

Lenore "Tony" Weldon, the daughter who filed the lawsuit, did not vote.

In her lawsuit, Tony Weldon, who is one of her mother's three trustees and an attorney, names the two other trustees as defendants: News Tribune General Manager Larry M. "Mike" Vivion and Managing Editor Richard F. McGonegal. Her suit argues they should have used their powers as trustees to prevent the sale.

But, in a countersuit expected to be filed Monday (June 27), Vivion and McGonegal argue they have a financial responsibility to the three children -- the heirs of the estate -- to close the stables' nonprofitable breeding operation.

Tony Weldon wants to keep the stables in operation. She said the sale would go against the wishes of her 83-year-old mother, who suffers from dementia.

Tony Weldon first filed her lawsuit on June 8 to prevent the sale of about 200 horses. The property would not be sold and about 80 horses would remain on the property.

 

 

Cole County Circuit Judge Richard G. Callahan has scheduled a 1:30 p.m. hearing Wednesday (June 29) to consider her request for an injunction to block two sales that already have been scheduled for the horses, on July 13-15 and Oct. 27-29.

The response being filed Monday asks the court to declare that the trustees are obligated to "maximize the profitability of the Trust for the benefit of all of the beneficiaries of the Trust," including the ability to acquire, manage or dispose of property.

Apparently differing interpretations of Mrs. Weldon's wishes, as stated in a trust she established, are at the heart of the legal battle.

She first created the trust in 1998, saying it was her "intention (and) desire that these assets not be disposed of by the" trustees.

But, she added, she "has complete confidence" in her trustees and said they "may dispose of Trust assets if their sound business judgment dictates."

The 1998 Trust was amended in September 1999 and again in December 2000.

Only Vivion and McGonegal were named as trustees in the first two versions, with Tony Weldon being added as a third trustee in the 2000 amendment.

The holding company board was established to direct operations for the stables and for the Jefferson City News Tribune, California Democrat and Fulton Sun newspapers. Tony Weldon publishes the Fulton Sun.

In addition to Vivion, McGonegal and Tony Weldon, the board includes Mrs. Weldon's two other children, Gifford Weldon and Sally Proctor, and two retired News Tribune officers.

Board members said that in the May 31 board meeting, Gifford Weldon began a presentation to close the breeding operation. He offered statistics showing that Callaway Hills historically has not been profitable and its losses have been covered by profits earned from other Weldon Holding Co. operations.

Tony Weldon left the meeting before Gifford Weldon finished his presentation, which included a reminder that Weldon Holding Co. counsel has advised directors that they have a fiduciary responsibility to preserve the future inheritance of the three children. Mrs. Weldon's trust provides that her three children will share equally.

Gifford offered the resolutions as a motion, Sally Proctor seconded, and the board voted 5-1 in favor, with Tony Weldon absent.

In her lawsuit, Tony Weldon contends that the decision should have been made by the three successor trustees, not the seven-member board.

"Mrs. Weldon intended that the three Co-Successor Trustees would not dispose of Callaway Hill Stables during her lifetime and that it would pass intact through the Trust to Lenore T. (Tony) Weldon," she argued.

She added: "Defendants Vivion and McGonegal should have opposed the resolution to dispose of Callaway Hills Stables and used their powers as Co-Successor Trustees to prevent such disposition, even to the point of removing any contrary-minded directors, if necessary."

In their planned response, Vivion and McGonegal contend: "For sometime now ... Callaway Hills Stables has been consistently operating at a deficit and otherwise losing money in a substantial amount, all to the general detriment and the viability of the ... trust, and to the detriment of the beneficiaries of the trust."

Neither Gifford Weldon nor Sally Proctor were named in the initial lawsuit.

They are included as defendants in the declaratory judgment case, so they are part of the case as it goes through the court.

Editor’s Note: The following information was taken from the Missouri State Courts web site -

June 29, 2005 - Hearing Held - Parties appear by counsel and announce that by agreement the request for Preliminary Injunction is Withdrawn; Sale scheduled for 7/13/05 is postponed indefinitely;


Case set for Trial
8/26/05 at 9:30 am.


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