Is the Disney Company Run by the Disney Family

This story first appeared in the May 30 upshot of The Hollywood Reporter magazine.

Before Walt Disney's youngest girl, Sharon Disney Lund, died in 1993 of breast cancer at age 56, her three grown children gathered in a North Hollywood part and were told about the vast fortune that awaited them. Brad and Michelle were the then-23-yr-onetime twins from Sharon'south 2d spousal relationship to Beak Lund, the real estate programmer who scouted the 27,000 acres in Orlando that afterward would get Disney World, Walt's second "Happiest Identify on Earth" afterwards Disneyland in Anaheim. And so at that place was Victoria Disney, then 27, the daughter adopted by Sharon (who herself was adopted) with her first husband, Robert Brown. All iii already lived comfortably. But this was a whole other level of wealth on the table.

Per the terms of their combined trusts — today worth almost $400 million — Walt Disney's grandchildren were to receive twenty percent distributions, a good portion of it in Disney stock. The payouts were to exist dispensed to the three children at the ages of 35, 40 and 45, once amounting to about $20 meg (and now closer to $30 million) for each every five years. But in that location was 1 important caveat: Sharon empowered iii trustees — including, at the time, ex-married man Nib and older sister Diane Disney Miller — to withhold distributions in the event the children did non demonstrate "maturity and financial power to manage and use such funds in a prudent and responsible manner."

The caveat would prove to have a catastrophic impact on the Lund branch of the Disney family. Its estimation by the trustees on the twins' 35th and 40th birthdays would lead to accusations of conspiracy and mental incompetence and would culminate in ugly depositions, complete with insinuations of incest, leading up to a two-week-long boxing of a trial in Dec in Los Angeles Superior Courtroom. On i side of the lawsuit is Brad, now 43; his lawyers; his begetter, Bill, 83; and his stepmother, Sherry Lund, Bill'south 5th wife. On the other: the three current trustees, each paid up to $1 1000000 annually (and some years more) for their role, who counted Brad'south twin sis, Michelle, as a witness, and who were represented by lead chaser Peter Gelblum. Brad's side was contesting the trustees' rulings for his 35th and 40th birthday distributions that adamant he lacked the mental abilities to oversee them. The trustees had reached the contrary conclusion almost his twin sister, Michelle, application her millions on her birthday despite word of her history of drug habit and a brain aneurysm in 2009 that had left her with uncertain mental abilities.

The heated testimony included Sherry accusing the trustees substantially of brainwashing her stepdaughter Michelle against her and Neb. She also blamed them for trying "to ruin our family" and attempting "to kill my hubby over this," as Gelblum probed whether Sherry was backside a "campaign to sue everyone who gets between [her] and Brad's money." For a $140 billion company built on highly-seasoned to families, the inheritance state of war has been an ugly sideshow. And information technology is a far cry from the way things used to exist in the Disney dynasty.

Walt Disney with his ii teenage daughters, Diane and Sharon (right, female parent of Brad and Michelle), in 1950.

Since Walt Disney died in 1966 at age 65, his two children, Diane and Sharon, shied abroad from Hollywood. Diane had 7 children of her ain, while Sharon — who briefly became a model and actress (she had a small role in the 1957 film Johnny Tremain) — settled into a comfortable life as a female parent of three kids. Says Jim Korkis, who now writes for an all-things-Disney site chosen Mouse Planet: "When I worked at Walt Disney Earth and asked nearly Walt'southward grandchildren, the response was, 'They spend their time managing their portfolios.' Walt was adamant most keeping his children and grandchildren abroad from the business." With the exception of Walt'south nephew, Roy, who helped bring in Michael Eisner as CEO in 1984 to revitalize the visitor — and later fought unsuccessfully to remove him — the family largely has stayed away from corporate affairs, choosing to exert their wealth and power in other ways, including philanthropically.

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Sharon gave birth to Brad and Michelle on June v, 1970, and endeavored to shelter them from Disney fame as they grew up in Los Angeles. Today, Brad tells THR he led a "very normal life" despite the family fortune. (Michelle couldn't exist reached for comment for this story.) Although Brad never met his grandfather Walt, he picked up the patriarch's enthusiasm for model airplanes and trains, and until recently, he was very close with his twin sister.

Both Brad and Michelle attended private schools for children with learning disabilities. The extent of the disabilities — for Brad in item — would have a major touch on the trustees' rulings. At various points in his life, Brad was described past his father as having Down syndrome and fetal alcohol syndrome. Later on he received a certificate in culinary preparation from Cape Cod Community College, Brad worked several jobs, including at a eating place bussing tables, in the mailroom of an insurance company, making smoothies at a juice bar and working the counter at a UPS store, which he also owned. In 2003, Brad moved from Orange Canton to just outside Phoenix, next door to his father, Neb, and stepmother Sherry, whom Pecker married in 1999, half dozen years after Sharon died and about 20 years subsequently they divorced. Sometime later, trustees came to believe that Sherry began to wait into adopting Brad.

Michelle, who was diagnosed with dyslexia equally a child, never has held a job. She owns three homes, spending much of her time in Newport Beach, Calif.

Walt'southward other daughter and Sharon's older sister, Diane, ane of the 3 trustees in charge of the inheritance, with Robert Iger (left) and Michael Eisner.

By all accounts, Michelle, Brad, Bill and Sherry — the Lund side of the Disney clan — had gotten along well. Subsequently their mother, Sharon, died, Michelle and Brad took annual trips with Pecker and Sherry to a Wyoming farm ranch and Hawaii. Together, the family bid on and bought Elton John's "Candle in the Wind" original lyric sail for $400,000 at an auction — Brad wielded the paddle — and donated information technology to the Princess Diana Museum. All of the Lunds were committed to the Sharon Disney Lund Foundation, donating money to cancer research and visiting the scientists to personally view the results of their breakthroughs.

Victoria, the twins' half sister from Sharon'south first marriage, was a different story. Victoria was said to live a disheveled existence, her hands blackened from heroin use. In her terminal years, Victoria would charter planes and splurge on $five,000-a-night suites at the Purple Palms flat homes in Las Vegas. She once went on a Disney cruise send and destroyed her suite in such spectacular fashion that Eisner, and so-CEO of the company, had to phone call the trustees and make them pay for the amercement. The family staged numerous interventions, to no avail.

Yet when Victoria turned 35, the trustees signed off on her birthday distributions of $20 million. A year later on, in 2002, she was dead. Her share of the family unit fortune was added to Brad's and Michelle's. (Per the terms of the trust, any nondisbursed coin gets ancestral to the children, siblings or charity.) Sherry afterward would testify about Victoria's sorry tale to question the competence of the trustees.

On June 5, 2005, when Brad and Michelle turned 35, the trustees — including Neb and a family financial manager named Robert Wilson, who replaced Sharon's sister, Diane, when she resigned in 1997 — handed downward the separate decision. They gave Michelle her millions but denied Brad his money because they felt that he hadn't demonstrated financial maturity. At some indicate in the past, Michelle was said to have suffered from her ain habit problems, but the trustees still ruled in her favor. (Sherry later testified that Michelle connected to partake of prescription drugs and alcohol, though other accounts insist a family intervention solved the problem.) Perhaps because Brad already was receiving about $one one thousand thousand annually from family unit trusts, he initially didn't sue over non getting his share.

Despite Michelle's past bug, information technology wasn't until she suffered a brain aneurysm and went into a coma in 2009 that her relations with the rest of the Lunds took a swoop. For two months, Michelle was hospitalized in an Orangish Canton facility. Doctors described her condition every bit "grave," and for some time afterward, even with months of rehabilitation, she couldn't hold a thought for more than 20 seconds, according to later testimony.

While Michelle was beingness hospitalized, Bill informed trustee Wilson that equally soon as Michelle could travel, he wanted to have her to one of the all-time neurological centers in the country — 10 minutes from his and Sherry's home in Arizona. The trustees began to harbor suspicions, mostly premised on the idea that Sherry was conspiring to gain control over her stepchildren and, ultimately, their inheritance.

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At the aforementioned time, Michelle herself began to grow wary of her father and stepmother. The prospect of being kidnapped by her father was raised to her. At a later on deposition, Michelle testified: "I had a lot of people talking to me nearly the possibility of what might happen." She added about her stepmother, "I've learned some things virtually her that just don't make me feel secure," probably referring to unsubstantiated rumors that had begun to surface that Sherry allegedly commissioned a hit homo to kill her ex-married man William Blair, who lived to talk well-nigh it. Michelle consequently hired ii bodyguards to physically bar Beak and Sherry from visiting at the hospital and had her male parent removed equally her wellness care proxy.

A breathtaking inundation of litigation followed. Brad sued trustee Wilson's wife, Gloria, for allegedly assaulting him at Michelle'southward hospital (Gloria Wilson admitted trying to hug him). Sherry sued Michelle's best friend since childhood, Dominique Merrick, with claims that she started the striking homo rumor. (Sherry lost the instance when it was traced to a family lawyer instead.) And most importantly, the other trustees sued to remove Pecker from their fold, based on an allegation that several years before, Bill had used trust money to score some $3.5 million in kickbacks from a real estate deal.

When confronted near allegedly taking the kickbacks, Bill presented a 2003 letter from Michelle purporting to qualify the deals. (A handwriting adept examined it, a trustee later would testify, finding information technology to be a forgery.) Bill exited as trustee, telling THR today that he bowed out voluntarily on the recommendation of his cardiologist. Every bit office of a settlement, he admitted no wrongdoing and, at the behest of son Brad, was granted $500,000 a yr for the rest of his life by an Arizona courtroom "every bit extraordinary fees for past services."

With Pecker out, the inheritance came under the management of Wilson, Andrew Gifford and Doug Strode — the latter 2 were involved with the financial affairs of the family unit through their positions at U.S. Trust, a individual bank serving high-net-worth individuals. Past the time of her aneurysm, Michelle had developed a sense of trust with Wilson and Gifford, naming them temporary conservators of her manor instead of her dad and stepmother.

Bill contested Michelle'southward decision, filing a petition to plant a conservatorship over her in 2010. He declared that Wilson, Gifford and Michelle's childhood friend Merrick had taken reward of his girl's compromised condition and exerted undue influence to control her $200 one thousand thousand in trusts. According to Wilson'south and Merrick's lawyer at the time, it was the other manner around, repeating word from ane of Michelle'due south friends who said that at that place existed "documents that would prove that Bill wanted to pull the plug on Michelle for fiscal proceeds, that he would benefit greatly from her death."

Afterwards a trial that took place in summer 2012, Orangish County Superior Court Judge Mary Fingal Shulte denied the Lunds' conservatorship petition, which prevented Pecker and Sherry from taking accuse of Michelle.

Meanwhile, every bit everybody fought over Michelle, her twin brother had his own legal problems.

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In 2009, the aforementioned year Michelle suffered her aneurysm, Sharon's sis, Diane, no longer a trustee (and since deceased), plus two of Brad'south one-half sisters from one of Bill's five marriages, filed a guardianship petition in Arizona to engage a third party to supervise Brad's care. The post-obit year, Michelle joined them. The nonetheless-pending petition cites the need for an engagement of a guardian because information technology "cannot be disputed that Bradford D. Lund is an incapacitated developed as a result of his chronic cognitive deficits and mental disorders."

In the center of all this, on June five, 2010, Michelle and Brad celebrated their 40th birthday. That month, the trustees held a coming together and reached the same conclusion as five years earlier, giving Michelle her money. Merely based on concerns about the influence that Bill was wielding over his son, the trustees saw fit again to decline to requite Brad his fortune, setting the stage for the trial that took place in December.

On Dec. 9, 2013, Brad's lawyers presented their argument to Fifty.A. Superior Court Judge Mitchell Beckloff, proverb the trustees driveling their discretion by denying him his 35th and 40th birthday distributions. In attendance were Nib and Sherry, who tells THR that Bill, 83, is frail and perilously almost decease. Brad and Michelle also were nowadays. (Fifty-fifty before the trial began, the venom flowed: Bill filed a $100 million defamation lawsuit against the trustees' lawyer Gelblum, who then demanded that Beak's lawyer be barred from the courtroom.)

Among other contentions, Brad's legal team asked why, in light of granting drug addict Victoria her $20 million, the trustees refused to hand down money to Brad, known for his frugality. They asserted that the trustees did this for their ain gain. Have Michelle. Why did she get her share of the trusts and not Brad? "The answer is uncomplicated," said Brad's lawyers. The sister's distribution went into the aforementioned bank, Kickoff Republic Trust Co. (FRTC), that already had been handling the coin, "ostensibly to be professionally managed," they said — pregnant that FRTC would continue to receive more than $675,000 a year in management fees from the trusts. Brad hadn't set up an asset management program for his distributions, potentially denying FRTC the ability to receive a cut.

As for the trustees themselves, their bounty is based in office on the corporeality of money in the trusts, which of grade is greater with Brad'south fortune in it than without. "The trustees are well-compensated, and I was, too, for many years," says Bill. "It was anywhere between $450,000 to $i million [apiece] a twelvemonth, and in some years, far greater." (It is worth noting that when he was a trustee, Bill himself had voted to deny his son's distribution on his 35th birthday, only coming to encounter it as an injustice afterward he no longer was earning trustee income.)

The trial testimony of Gifford, the Disney fiscal manager and trustee, underscored belief that Bill wielded undue influence over his son, particularly troubling considering his history with Michelle'due south trusts. "At the 40th birthday distribution, it was apparent that Brad relied most exclusively on Bill Lund for fiscal assistance," said Gifford. "Here was a person that was non just Brad's father only his financial confidante, and I had evidence that he took profits, and when he tried to justify it, he did it with a fraudulent and forged document." Gifford also testified "Brad had considerable disabilities that were evident." During previous legal proceedings, Brad'south physician submitted a report that said he had "a chronic cerebral disability with ii years progressive reject and unstable beliefs" and "limited insight." The courtroom tapped a medical investigator who came to the decision that his conditions required supervision. (Since then, Sherry says that they've consulted with four other doctors who take judged Brad to exist competent.)

Equally evidence that Brad did non understand the value of coin, Wilson testified about a 2004 family unit trip to Sweden to check out a major breakthrough in cancer research. "At a gift shop, nosotros were looking at a railroad train set," said Wilson. "At that place was a ruby-red 1, a blue one and a green ane, and he couldn't decide which ane he wanted. I said, 'Brad, why don't y'all buy all three of them? They're $15.' And he says, 'Oh, I can't afford that.'" Wilson continued, "The following nighttime, we were at a gift store on a ship, and they were selling these Russian eggs, and they were around $500 or more each, and I say, 'Brad, what did y'all go?' He said, 'Look what I got. I got these iii Russian eggs.'"

It was on this trip that Wilson said he learned from the original attorney who drew upward Brad's trusts that the divisive "competence" caveat, at the root of all the fighting, was "specifically for Brad; Sharon did not want to highlight Brad to be different and treated different than his sisters. It was code words that Brad will never get his distribution."

Michelle took the stand up on behalf of the trustees, testifying about her increasing isolation from her brother since his move to Arizona. Wilson already had described Brad as initially unhappy with his new dwelling house ("He'd say, 'Get me out of this hell hole'") and that since Brad relocated, it had get tougher to communicate with him ("People would screen the calls").

About the end of the long trial, Brad himself took the witness stand. (Earlier the trial, during depositions, Gelblum questioned Brad about whether he had physical relations with Sherry'south girl and his stepsister, Rachel, who lives with him. Brad denied it, so spent 2 days distraught in his room afterward, according to Sherry.) Asked whether his condition has improved since 2006, Brad said it had, explaining: "Well, there are several reasons. Number one, I've got glasses. Number ii, new hearing aid. Number 3, I'm on no medication. And number [four], I don't go every bit flustered every bit easy. I have a much improve memory."

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Brad spoke about the various jobs he'due south held, why he shut downwards the UPS store he bought and how he considers himself at present retired. Forth the fashion, he tossed around terms like "guardian advertisement litem" and said that no one bothered to option upward the phone to tell him he had been denied his birthday distribution. He too explained why he no longer wants FRTC to manage his assets: "They continue my trust hostage, and they refuse to hand me over what is legally and rightfully mine."

On March 25, Judge Beckloff issued a proposed determination, one that made it clear that the trustees weren't keeping Brad from his money so that they could earn more for themselves. "The courtroom is not persuaded that the Trustees have acted to withhold Mr. Lund's birthday distributions for fee-generation purposes," wrote Beckloff. "The court is convinced that the Trustees sincerely believe that Mr. Lund does not accept the maturity and financial ability to manage and utilize a substantial trust distribution. The Trustees are legitimately concerned well-nigh Mr. Lund's ability to protect himself from those around him who may wish to have financial advantage of him."

Brad'south team can claim ane small victory. The guess agreed that proper steps should be taken to remove FRTC as the institutional trustee in favor of Mutual of Omaha Bank. "While Bill Lund and Sherry Lund may have fomented Mr. Lund's dislike and distrust of FRTC, the court finds that dislike and distrust sincere," noted Beckloff.

Though the trial is over, the harsh backwash continues. "We've heard about other trustees turning on families," says Sherry from her home in Arizona. "We never thought it would happen to the states. When it does happen, it's devastating and overwhelming. It has ripped Michelle and Brad apart." Gelblum declined comment.

Asked why his girl testified against her brother on behalf of the trustees, Bill answers, "Stockholm syndrome."

Not surprisingly, the legal fight isn't over. In the issue that the ruling is final, Sherry promises an appeal. Plus, the guardianship petition over Brad yet is pending. And soon will come some other big birthday: Next year, the twins turn 45. Trustees once over again will vote on whether to turn over tens of millions of dollars to Walt Disney's grandchildren. And all that might be a prelude to the battle over the hundreds of millions that Brad hasn't received. Tin can he bequeath it to his stepsister Rachel? That's why the trustees believe Sherry is trying to adopt Brad. Whatever courtroom they come across in next, it volition be far from the happiest place on World.

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Source: https://www.hollywoodreporter.com/news/general-news/walt-disney-family-feud-inside-706029/

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