The children of the late billionaire Richard Mellon Scaife have claimed that trustees allowed him to drain their $210 million trust to prop up his struggling newspaper, the Pittsburgh Tribune-Review.
Jennie Scaife, 51, and her brother David Scaife, 48, said in court documents filed in Allegheny County, Pennsylvania last week that they were told at least $90 million would be left to them.
But when the Scaifes - who were also left nothing in their father's will - checked the trust's balance after his death on July 4 this year, they learned that it was completely empty.
In court documents, they accuse his three trustees of allowing their banking and oil heir father to use the trust as 'his own personal bank account' and to cover the Tribune-Review's losses, even though it was their duty to preserve funds for them, the Pittsburgh Post-Gazette reported.
Emptied trust funds: Richard Mellon Scaife, the owner of the Tribune Review newspapers who died in July, used millions of dollars from his children's trust to keep the publications afloat, they have claimed
They are demanding an accounting of spending and a hearing is scheduled in the case for December 17.
He left nothing to the pair in his will, which split the funds of his other trusts - estimated to be in the billion-dollar range - between his two foundations, the Sarah Scaife Foundation and the Allegheny Foundation.
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ShareThe trust in dispute was the only one that did not give him full control over how the assets were used.
It was set up in 1935 by their grandmother, Sarah Mellon Scaife, who said that it should be used for his 'welfare' but that any amount left over should go to his 'issue'.
If he did wish to use it, the trustees were expected to weigh up his interest with the interests of his children, the Post-Gazette reported.
Broken promises: Scaife's son David Scaife, pictured left, said in his petition that he was told he and his sister Jennie Scaife, pictured right, would be left at least $90 million in the trust
From 2000 to 2004, Scaife took $130 million for the Tribune-Review and much of that sum came from the trust, according to the petitions.
Then in 2002, he took out $19.5 million from the trust and then in 2004, he took out $18 million.
They claim that in 2005 the trust contained $210 million and by the end of 2007, its balance was $140 million.
David Scaife's petition says that the trustees assured him in 2008 that other funds were being used for the newspaper, and that there would be $90 million left for him and his sister.
Attorneys told the Post-Gazette that if a trust is usually significantly emptied, the children might be asked to sign a waiver allowing it - but this did not happen in this case.
In his petition, David Scaife called the newspaper as 'a waste of trust assets'.
Family fortune: Sarah Mellon Scaife, pictured in 1955, set up the trust fund in 1935 and intended for it to be passed down to her son's children, they claim in their petitions which were filed last week
Michael J. Hussey, an associate professor of law at Widener University in Chester, who is not involved in the case, said that they might have a cause of action.
He said they could seek to recover the money from their father's estate that they think should have saved for them.
The executor of Scaife's estate, Yale N. Gutnick, disputes the children's claims. Gutnick is one of the trustees, along with Scaife cousin James M. Walton and PNC Bank.
They will now have to convince the judge that they should not have to detail the trust's spending.
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