(Bloomberg) -- Rupert Murdoch lost his bid to change his family trust and hand sole control of his media empire to his eldest son.
Edmund Gorman Jr., the Reno, Nevada, probate commissioner hearing the case, rendered a verdict on Saturday, the New York Times reported, citing a sealed document saying the elder Murdoch acted in “bad faith” when he tried to change an irrevocable trust to leave Lachlan Murdoch in charge.
An attorney for Rupert Murdoch told the Times he intends to appeal the ruling.
A spokesperson for the three Murdoch children who challenged their father’s efforts issued the following statement: “We welcome Commissioner Gorman’s decision and hope that we can move beyond this litigation to focus on strengthening and rebuilding relationships among all family members.”
The case weighed heavily on the future of some of the highest-profile media properties in the world. Through a family trust, Murdoch, 93, owns about 40% of the voting stock in both Fox Corp., the parent of Fox News, and News Corp., which counts the Wall Street Journal and the Times of London among its many holdings.
Upon Murdoch’s death, control of the trust was to be split among his four oldest kids. Instead, he sought to give voting power to Lachlan, who serves as chief executive officer of Fox and chairman of News Corp.
The case was heard in probate court, which manages legal proceedings around the transfer of property after a person’s death, and wasn’t open to the public. News outlets, including the New York Times Co. and CNN, unsuccessfully sought to open up the proceedings.
A Nevada probate commissioner determined in June that Murdoch could change the trust as long as he was doing so in good faith and in the best interest of his heirs. Murdoch argued that the change would benefit all six of his children because it would prevent Lachlan’s more politically liberal siblings — Prudence, Elisabeth and James — from making Fox News more moderate, thus hurting its value as a conservative media brand.
The trio chose to share legal counsel and take their father to court in a trial that began Sept. 16, arguing the change violates the trust’s original conditions and that they would be wrongfully disenfranchised. Murdoch hired his own team of lawyers, including former US Attorney General William Barr, who was added as a family representative to the trust.
Nevada’s lack of income and inheritance taxes, as well as its confidentiality protections, have made it a top venue for family trust management. Picking Reno over the bustling hub of Las Vegas added another layer of privacy to the closed-door proceedings, according to Nevada probate lawyer Elyse Tyrell.
Under Nevada law, the losing party can appeal within 14 days, which would escalate the case to the district probate judge; that judge can either reverse the previous judge’s recommendation, declaring it erroneous, or uphold it. One of the parties could then appeal to the Nevada Supreme Court.
(Updates with family statement in fourth paragraph.)
©2024 Bloomberg L.P.