Breach of Fiduciary Duty

Victor Posner amassed an extraordinary amount of wealth as a corporate raider, but his estate is as messy now as his business affairs were while he was alive.

Victor Posner amassed an extraordinary amount of wealth as a corporate raider, but his estate is as messy now as his business affairs were while he was alive.

A lawsuit has been filed against a prominent Miami law firm by Brenda Nestor, the business associate and former girlfriend of businessman Victor Posner. Nestor was the primary beneficiary of Posner’s $321 million estate. The lawsuit charges Akerman LLP with civil conspiracy, breach of fiduciary duty and legal malpractice. Posner died sixteen years ago, but the battle over his estate is far from over.

Wealth Advisor’s article, “$300M Miami Estate Fight Gets Ugly, 16 Years Later,” reports that, according to the complaint filed in Miami-Dade Circuit Court last month, Brenda Nestor alleges that she suffered damages as a result of “negligent and reckless” legal advice the Akerman law firm provided to her court-appointed successor of Posner’s estate.

In 2015, Judge Celeste Hardee Muir removed Nestor, after she allegedly disregarded court orders for her failure to provide a full accounting of her actions as the Posner estate’s personal representative. The judge replaced Nestor with lawyer Philip von Kahle.

Nestor accused von Kahle—who is not named as a defendant in her lawsuit—of making her a scapegoat for the Posner estate’s dire finances. Her lawsuit states that the attorney is exercising his newly-developed 20-20 hindsight of the Great Recession that occurred in the late 2000s to early 2010s and that von Kahle started to second guess thousands of transactions she made, while acting as personal representative. She said that von Kahle was trying to “Monday-morning quarterback” her actions during her 13-year appointment as personal representative—many of which were approved by the probate court.

Nestor claims that von Kahle hired the Akerman law firm, which provided him with improper advice, such as recommending he file a lawsuit in 2016 against Fidelity to claim a $23.1 million bond she posted back in 2002 that allowed her to operate Posner’s real estate business through his estate. This lawsuit claims that Nestor caused the Posner estate to lose $375 million in value to negative $50 million during her tenure as personal representative. Her successor also accused Nestor of pouring “tens of millions of dollars into worthless businesses that were insolvent and had no value to the estate.”

Nestor accuses the law firm of breaching its fiduciary duty, by failing to advise the court of conflict of interests on Kahle regarding the sale of assets by self-dealing. She said the law firm knew this was happening, but did not tell the court about it. Nestor is being accused by von Kahle of using estate funds improperly, distributing money to herself personally and to companies that she had invested in.

Reference: Wealth Advisor (May 21, 2018)“$300M Miami Estate Fight Gets Ugly, 16 Years Later”