A lawsuit revealing a rift between two of Paul Newman’s daughters and the late actor’s charity alleges that its leaders are betraying Newman’s directives to keep his family closely involved in the organization.
They claim Newman’s Own Foundation improperly reduced required contributions to entities controlled by daughters Susan Kendall Newman and Nell Newman from $400,000 to $200,000 a year, according to the lawsuit filed Tuesday in Connecticut state court. They claim it is the first step towards their family’s complete ouster from the foundation funded by their father’s royalties profits.
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“Newman’s Own Foundation has lost its way and derailed its mission to preserve and honor the legacy of Paul Newman,” the complaint states. “The years since Mr. Newman’s death have consisted of a long and consistent pattern of indifference, by those in control, of Mr. Newman’s specific intentions and direction, combined with mismanagement, scandals and questionable practices.”
The Oscar-winning actor and director created the Newman’s Own Foundation in 2005. The nonprofit organization controls and is funded by the food and beverage company Newman’s Own, which uses the actor’s name and likeness to sell salad dressings, pasta sauce and other products. The foundation reported revenue of $24.6 million in 2020, according to tax filings.
According to the agreement, the daughters claimed that their father conditioned the agreement on their participation in the foundation. They are seeking $1.6 million in damages to be given to charities of their choice and an order forcing the foundation to follow Newman’s wishes.
The foundation said in a statement that the board’s philanthropic decisions vary each year and that it must make the best use of its finite resources. “Best practices around charities do not allow for the creation of perpetuity funds for anyone, including Nell and Susan Newman,” the statement continued. “A wrongful lawsuit based on this misguided desire will only divert money from those who benefit from Paul Newman’s generosity. While we expect to continue to seek recommendations from the Newman family for worthy organizations, our funding decisions are made each year and will continue to reflect Paul Newman’s clear purpose and our commitment to the best practices that govern private foundations.”
The daughters are not board members of the foundation.
When he created the foundation, Newman laid out specific plans for structuring it into a living trust. A 2005 document he shared with his advisers and daughters detailed that Newman’s Own would pay royalties to its parent company for the use of his name and image rights, according to the complaint. The foundation, in turn, will distribute funds to the daughters’ foundations to donate to charities of their choice.
But the suit alleged that Robert Forrester, Newman’s former adviser who eventually became CEO of Newman’s Own and chairman of the foundation, and Brian Murphy, Newman’s longtime business manager, manipulated the actor when his mental capacity was declining to appoint them to the board in his will. .
“It has been clear for some time that Mr. Newman was unable to act as a trustee of the Living Trust,” states the complaint, which is embedded below. “Instead of advising Mr. Newman’s daughters of their right, and their father’s express direction that they should, to appoint a co-trustee to act with Forrester and Murphy, Forrester and Murphy unilaterally undertook the review of Mr. Newman’s affairs, in terms of the NOF and in terms of his estate planning decisions.’
Newman’s family was “shocked” when his will was read to them because it was so far from what they had been told leading up to the actor’s death, according to the lawsuit. They were threatened with disinheritance if they disputed it.
Although it refers to Newman’s living trust, the complaint does not cite the foundation’s governing documents, which would detail whether the foundation is mandated to distribute $400,000 to the daughters annually.
Says Paul Roy, an estate planning attorney at Withers who is not involved in the matter THR that Newman’s wishes in the living trust for how the institution operates are not binding. “It sounds to me like the trustees were instructed by Paul to consult with family members in making decisions about distributions, but that’s not necessarily a legal right to decide where the distributions go,” he noted. “That makes sense because they’re not directors.”
The board removed Forrester as CEO in 2019 amid allegations of misconduct, including harassment and creating an unhealthy work environment. The girls’ suit also alleges the foundation improperly paid for him and his wife to fly first class and stay in expensive hotels.
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