The court battle regarding The Alton John Schneider Restated Revocable Trust and Al J. Schneider’s heirs is “far from a final resolution,” a newly filed court document states.
An adjoining court document also asks that Nancy O’Hearn, Christe Coe and her husband Randy Coe pay out punitive and compensatory damages to Mary Moseley and Dawn Hitron after they allegedly “conspired to unlawfully prevent the sale of the Galt House and any proposed sale of the Company’s other assets.”
Rebecca Jennings, an attorney with Middleton Reutlinger representing Moseley and Hitron, filed a motion to intervene that, if approved by Jefferson County Circuit Court Judge Mary Shaw, would allow Moseley and Hitron to file counterclaims against their sisters O’Hearn and Christe Coe, along with brother-in-law Randy Coe.
If the motion is approved, Jennings will be allowed to file a complaint alleging that Christe Coe is guilty of defamation, intentional interference with expected inheritance, and civil conspiracy, among other charges. O’Hearn faces similar allegations.
Moseley and Hitron claim that Christe Coe and O’Hearn have made “false statements” in court documents and to the media about them, exposing “Moseley and Hitron to public hatred, ridicule, contempt or disgrace.”
They further allege that Christe Coe breached her fiduciary duty by taking actions to prevent the sale of The Al J. Schneider Co.’s assets, which have been valued at $125 million and $130 million in various court documents.
To date, Christe Coe’s husband Randy Coe has not been a party to the case, but Jennings’ motion asked for permission to add Coe because he serves as his wife’s representative on the board of directors for The Al J. Schneider Co., among other reasons.
The new pleading claims that Randy Coe also aided and abetted his wife in breaching her fiduciary duties, wrongfully used court proceedings, and intentionally interfered with expected inheritance.
Jennings told IL that Moseley and Hitron moved to file the counterclaims only after Judge Shaw appointed a third-party to handle the dissolution of the trust because they “didn’t want to have any question regarding self-dealing.”
Now that the future of the trust is in the hands of an unbiased third-party, “they feel they can stand up for their own personal rights (as heirs),” Jennings said.
According to the terms of the trust, all four sisters are entitled to roughly 19 percent of stock in the Al J. Schneider Co. Each will receive 60,000 shares of Class A voting stock in the company, as well as some non-voting stock.
By requesting a restraining order against the sale of any Al J. Schneider Co. properties and filing a suit alleging that Moseley and Hitron breached their fiduciary duties, the pleading claims, the actions of O’Hearn and the Coes resulted in the devaluation of the trust and therefore Moseley’s and Hitron’s inheritance.
According to court documents, various commercial real estate firms found that hotel sales in Louisville were at “historic highs” and that prices were expected to drop in early 2016.
“The market for hotels in Louisville, Kentucky was reaching saturation with a number of new hotels being built, and that the market would be weak after the closing of the Kentucky International Convention Center in June 2016,” the complaint states.
For those who haven’t been following this case, Moseley is the president and CEO of The Al J. Schneider Co. and a descendant of prominent businessman Al J. Schneider. Coe, Hitron and O’Hearn are her sisters. All four women, along with 17 other heirs, are beneficiaries of Schneider’s trust, which owns stock in the multi-million dollar real estate company Al J. Schneider Co.
Coe and O’Hearn are suing Moseley and Hitron claiming they breached their fiduciary duty as trustees while overseeing the The Alton John Schneider Restated Revocable Trust. The allegations stem from the attempted sale of the Galt House Hotel to hotel management company Columbia Sussex Corp. The Al J. Schneider Co. owns the hotel.
Columbia Sussex offered to buy the Galt House Hotel for $135 million.
“If the sale had closed, it would have permitted the payoff of debt, allowed the Company to continue ownership of its office buildings, and given the Company significant cash,” the pleading states. “The sale would also have allowed the Company to make larger money distributions to Shareholders.”
Christe Coe and O’Hearn have argued in court that the majority of the 21 beneficiaries did not want to sell the Galt House Hotel or any other company assets.
However, Moseley and Hitron have countered that their sisters coerced other heirs into signing a document denouncing the sale, and in the most recent court filing, they noted that seven of the beneficiaries signed a document stating that they wanted to sell their voting shares, valued at $23 million, in exchange for cash should The Al J. Schneider Co. put out a call to buy them.
“Coe and O’Hearn do not want the call exercised because they believe it will dilute their alleged ‘control’ of the Company stock after the distribution is made,” the complaint says.
In a majority vote, the board of directors for The Al J. Schneider Co. and trustees of the The Alton John Schneider Restated Revocable Trust in late 2014 approved a liquidation plan that would allow the company to market and sell off all its assets if its executive leadership and trustees agreed to do so. The company in February listed its 25-story office building Waterfront Plaza for sale.
The complaint reveals some details of the attempted Galt House Hotel sale process that have not previously been made public, including the fact that Al J. Schneider Co. countered Columbia Sussex offer.
In June 2015, the company’s board of directors decided to hire international real estate firm CBRE to list its properties. CBRE Hotels’ Institutional Properties Group leader Andy Wimsatt represented The Al J. Schneider Co.
Wimsatt presented a counter offer of $142 million to Columbia Sussex, but it refused to budge on its original offer, the complaint states. After that, Wimsatt reached out to other companies including The Chartres Lodging Group, Apollo Group Management and Trinity Hotel Investors.
Apollo only offered $120 million, and Chartres Lodging representatives said the company would put in an offer if the Galt House Hotel repositioned itself as a more upscale chain, an estimated cost of $80 million to $90 million, the pleading says.
Trinity Hotel Investors was eliminated as an option because the company was only interested in owning the Galt House Hotel if it partnered with another investor, who would own 90 percent of the hotel.
David Oetken, a board member and Al J. Schneider heir, said he’d rather place the hotel on the market at the risk of fetching a lower price than accept Columbia Sussex’s offer outright at a board meeting on Oct. 27, 2015. At a subsequent meeting on Nov. 2, Randy Coe echoed similar sentiments.
Still, a majority of board members voted to move forward with the negotiations with Columbia Sussex. Because of the ongoing litigation, however, Columbia Sussex has halted talks regarding the sale. But the complaint notes that the company could be interested in resuming negotiations in the future.