Thursday, November 11, 1999

Lindsey sues estate
insurance company

She says firm failed to pay legal fees

By Rick Daysog


Former Bishop Estate trustee Lokelani Lindsey, who was removed from her $1 million-a-year post in May, has sued the trust's insurance company for failing to pay more than $900,000 of her legal fees.

In a complaint filed in U.S. District Court yesterday, Lindsey's attorneys said that Federal Insurance Co. refused to pay for legal costs that she ran up in the five-month trial over a permanent removal suit by former trustees Oswald Stender and Gerard Jervis.

Lindsey's lawyers Michael Green and David Gierlach said that Federal Insurance should cover Lindsey's attorney fees in that trial since it has agreed to cover her legal costs in a separate removal action brought by the state attorney general.

Green and Gierlach said that the Stender and Jervis suit is virtually identical to that of the attorney general's removal suit, which is pending. They added that the attorney general's office also took an active role in the Stender suit.

Stender and Jervis sued for Lindsey's removal in December 1997, alleging she breached her fiduciary duties, mismanaged the trust-run Kamehameha Schools and was unfit to serve as a Bishop Estate trustee.

Circuit Judge Eden Elizabeth Hifo removed Lindsey from the trust on May 6, one day before Probate Judge Kevin Chang temporarily removed fellow trustees Jervis, Henry Peters and Richard "Dickie" Wong and accepted Stender's resignation.

Lindsey is in the process of appealing Judge Hifo's ruling.

Lindsey's attorneys previously cited her legal fees as a major factor in her financial problems.

Earlier this year, the Internal Revenue Service placed liens on Lindsey's Hawaii properties for failure to pay more than $400,000 in federal income taxes for 1997 and 1998.

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