Du Pont heiress paints unflattering picture of Wilmington Trust (DE)

A du Pont family heiress is asking a Delaware court to remove the once family-controlled Wilmington Trust Co. as trustee of four trusts created for her benefit, alleging the bank made imprudent investments, unjustly enriched itself and disclosed personal and confidential information to other distant family members.

Anne du Pont Shirley of Rembert, South Carolina, has petitioned Chancery Court to appoint PNC Bank as trustee and to reimburse payments garnished from the trusts by Wilmington Trust for the benefit of its parent company, M&T Bank Corp.

A spokesman for Wilmington Trust and M&T did not return a request to comment.

Shirley is the daughter of the late Lammot du Pont Jr., a great-great grandson of the founder of the DuPont Co. At the time of his death in 1964, Lammot du Pont was an assistant vice president of Wilmington Trust, a bank created by his family members in 1903.

Shirley’s grandfather, Lammot du Pont, was the eighth family member to head the chemical company and led the company through the commercialization of Lucite and nylon. Lammot du Pont’s brother, Pierre S. du Pont of Longwood, was one of the first directors of Wilmington Trust.

Lammot du Pont created trusts in 1941 for the benefit of his son, Lammot Jr. and his son’s descendants with Wilmington Trust as trustee. In addition, Margaret F. du Pont, Lammot’s wife, created trusts in 1954 with Wilmington Trust as trustee to benefit Lammot Jr.’s descendants.

According to the petition, Wilmington Trust invested trust money in various illiquid funds, including Wilmington Real Estate Managers Fund Select LLC, without sending proper notice and disclosures to Shirley. The bank has “not met with Anne in years to discuss the investment allocation or performance” of the trusts, the petition alleges.

Yet, Wilmington Trust “unjustly enriched” itself by charging a management fee for the illiquid investments, for which the investments also charged a management fee, the petition alleges.

Wilmington Trust is also trustee of a 1976 trust, called Anne A. DeM. Du Pont Revocable Trust that was created by Shirley, according to court papers. It is currently valued at $2.5 million, the petition says. In 1997, Shirley borrowed $2.3 million from Wilmington Trust that was later secured by the assets in the trust and a mortgage on Shirley’s property in South Carolina known as “Ice House.”

After Wilmington Trust was sold to M&T in 2011 the loan documents were assigned to M&T, the petition says. According to the petition, Wilmington Trust improperly garnished payments from Shirley’s other trusts to pay down the note.

“The onerous terms of the note, combined with the lack of Anne’s ability to remove Wilmington Trust and Wilmington Trust’s illiquid and nontransferable investments…put Anne in a vulnerable position subject to the whims of Wilmington Trust, and later, M&T,” the petition says.

Wilmington Trust extended the note to Shirley for the “sole purpose of generating additional income,” from its relationship with Shirley, the petition alleges.

Beginning last year, M&T began to “aggressively” pressure to Shirley to pay off the note. Then in early 2015, M&T made it clear it was going to demand full payment of the loan by the end of June 2015, despite Shirley’s “exemplary payment pattern and M&T’s more than adequate collateral, and without any explanation or justification,” the petition says. After discussions, M&T agreed in March to give Shirley 90 days to pay off the loan if Shirley agreed to pay down the note by $575,000 on by April 24.

“Fortunately, Anne was able to secure a commitment to refinance the entire ($) 2.3 million note from WSFS Bank,” the petition says. “Ann repaid the note in full on May 29, 2015.”

M&T charged Shirley almost $17,000 for its attorney fees in connection with demanding repayment of the note, the petition alleges.

“… Anne had no choice but to pay in order for M&T to release its liens on the collateral necessary for the refinancing,” the petition says.

In her petition, Shirley alleges Wilmington Trust is unfit, unwilling or unable to administer the trusts properly. Hostility between the bank and Shirley “threatens the administration” of the trusts, the petition says.

Shirley is asking the court to require Wilmington Trust to disgorge all fees paid and profits earned in connection with the investments in the trusts and reimburse the trust for the bank’s imprudent investments.

Attribution:

Du Pont heiress paints unflattering picture of Wilmington Trust
Maureen Milford
June 13, 2015
The News Journal
http://www.delawareonline.com/story/news/local/2015/06/13/du-pont-heiress-paints-unflattering-picture-wilmington-trust/71175222/

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