The presented a real problem, that the folks in charge addressed pretty quickly.
The problem was that everyone felt emotionally tied to these businesses that they had built up, their families and communities in many ways identified with them. Many of them operated in small or suburban sized communities so they weren't just some random business to the families involved.
But as it grew it was clear it wasn't "dad's bank" or such anymore as far as % of ownership went and so on. The individual "dads" or other owners made those deals and understood it, but the question was would their families understand and could that create conflict?
Obviously after acquisition / offering additional opportunities to buy stock (this was a privately held company) things changed and maybe not everyone was on the same page and they wanted to avoid any conflict if someone showed up thinking they were in charge who wasn't... but still had a big enough piece of the pie to cause more than a futile legal fight.
The solution was that the bank (actually the holding company that held the bank and other entities) would be employee owned (i'll not get into how that works just for the sake of brevity) and effectively the old guard would only be allowed to own X% of the shares. Any shares transferred to children had to meet certain criteria (only so much could be transferred) and events like inheritance often would require the shares to be sold back to the holding company at a given price (they had a system of internal and external evaluations to determine the pricing).
To date it has worked out pretty well. Perhaps the answer to some of these issues is to simply not to pass the business on whole hog, at least not in a manner where control is an issue.
I know of a similar business that has had an almost similar implosion. Run by a patriarch and matriarch husband-and-wife duo, a small fortune (much less than the company in this article) of money was made in a niche manufacturing sector. The patriarch proceeded to take large chunks of the fortune and hemorrhage it out into passion projects (he also owned a thoroughbred racing company that bled money, just like the people in the article!).
Husband and wife would often times argue and try to bring employees into their drama and force them to take sides. Divorce was threatened several times.
Family members all worked for the company and came in to get a scoop of the ice cream. The company’s core business didn’t really diversify since the owner was focusing on all of these money wasting pet projects and as such when their main client scaled back their business the company became a shadow of what it once was.
Bottom line: mixing family into your business can turn out to be a risky maneuver.
1) If you have $1B an attorney will tell you that you can win the case. You are surrounded by yes men and women in many cases.
2) The court systems are not well setup for these cases. They let them spiral way over page length / deadlines etc. Compare to someone facing 5 years of prison - often adjudicated in relatively short order
3) For all sorts of gimmick reasons people create odd structures.
4) The people involved are used to getting their way rules be damned.
If we cared about fights of the rich if you just were allowed to take previous assertions at face value and kept the process tight things would move more quickly.
ie, if in previous cases / situations you claimed to have no control / no interest in an entity (liability claims / previous divorce claims / tax claims and structuring), then for purposes of current litigation that is what counts. All the blind / hidden beneficial owner / undated resignation letters / overseas tax and other gimmicks would be diminished here.
Put the page limits back in on filings to focus the armies of atty's. Nothing an attorney likes more than a vindictive budget be damned client who can afford the hourly rate.
> ie, if in previous cases / situations you claimed to have no control / no interest in an entity (liability claims / previous divorce claims / tax claims and structuring), then for purposes of current litigation that is what counts.
It sounds like you are getting at the concept of estoppel.
For example, Rich person A in cahoots with Trustee C claims no interest in (untaxed) asset B. When they litigate against each other Trustee C can struggle with estoppel because they themselves knew transaction was a sham so in communication with C rich person A WAS clear that they intended to maintain control.
We need to have something like an absolute public interest estoppel. If you assert something to the government or in court that reduces your taxes / avoids liability etc, then what you said to anyone actually suing you not critical.
Perhaps the limits should be placed on what can constitute a civil law case in the first place.
People over value items beyond the actual value because real or assumed ownership perverts rational behavior
Does capitalism oblige us to let this guy waste >30 people's working lives on something so obviously pointless?
A dollar spent by a billionaire is going to be less efficient than a dollar spent by a working-class person. Its just economics.