The trust battle between the Buss siblings over control of the L.A. Lakers has ended. Jeannie Buss and her brothers, Jim and Johnny, reached with an agreement for Jeannie to remain as controlling owner for as long as the family owns the famed basketball team.
On February 21 Jeannie Buss, the L.A. Lakers president and controlling owner, abruptly fired her brother Jim and hired basketball legend Magic Johnson to replace him as the new president of basketball operations.
Three days later Jeannie's two brothers called for a director’s meeting in what appeared to be a retaliatory move. Jim and Johnny Buss proposed that the board be composed of four directors, leaving their sister out. According to the family trust, Jeannie Buss must be a director to retain her role as controlling owner of the Lakers. The family has a 66% stake in the ownership of the team and four separate trusts mandate that Jeannie Buss be the controlling owner. She has been in this role since her father, Jerry Buss, died in 2013.
A month long fight in probate court between Jeannie and her brothers ensued, which included asking the court for a temporary restraining order to block the director's meeting. The motion for the restraining order included a four page declaration in which Jeannie maintained that her brother Jim was “completely unfit” to oversee basketball operations for the Lakers. Ms. Buss also stated in the court declaration that “despite the fact that I gave my brother Jim ample time to prove himself in his role.... I could not allow the damage being done to the franchise over the past few years to continue.”
Jeannie’s sister Janie, according to a source familiar with the drama, has taken the place of Jim Buss, who resigned as co-trustee as one of the requirements by his sister Jeanie to resolve the dispute. Her attorney, Adam Streisand, told the Los Angeles Times “Do not underestimate Jeanie Buss. There is not going to be a palace coup. Not now. Not ever.”
The brothers signed an agreement to waive the annual shareholders meeting, naming Jeannie Buss and four others the directors. The attempt to take over the board resulted in Jim Buss losing his position as a co-trustee for the four trusts.
“The trust instrument seems crystal clear,’ said Patrick Goodman, who teaches probate law at UCLA and reviewed the documents contained in the case. “Jerry Buss intended Jeanie and Jeanie only to be the controlling owner.”
Trial is set in Los Angeles Probate Court on May 15. The trial will most likely be dropped, as the family seems to have resolved their dispute. Despite the best estate and business planning, legal action is always possible. Nevertheless, making one's intent crystal clear in estate planning documents means that litigations are typically cut short. In my experience, such matters arise simply out of hurt pride or feelings, or unresolved emotions related to the death of a parent.
For questions about Trusts, Trust or Probate Litigation, or Prudent estate planning, call my Walnut Creek Trust and Estate Law Firm at 925-322-1795.