Donahue v. Donahue
A trust beneficiary challenges the former trustees administration of a family trust whose assets were concentrated in two privately-held real estate investment trusts (REITs.) The beneficiary claims the trust lost about $20 million in virtually certain stock appreciation by selling about 40 percent of the trusts interest in one of the REITs, and that the former trustee had a disqualifying conflict of interest because he bought for his own purposes additional shares of the same REIT, in which he was an officer and shareholder.
Court hold that the trial court properly interpreted the trust agreement and approved the former trustees accounting. Substantial evidence supports the trial courts determination that the trustee acted reasonably and prudently in selling assets to diversify the trusts investment portfolio, reduce its debt, and provide income to the trust beneficiaries. Accordingly, Court affirm the judgment.
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