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Court: Kamehameha
does not have to sue
trustees for legal fees

However, the trustees
and the estate's outside law
firms were not exonerated

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By Rick Daysog
Star-Bulletin

The Kamehameha Schools is not required to pursue its former trustees for millions of dollars in legal fees racked up during the three-year trust controversy, under a ruling today by a state judge.

But Probate Judge Kevin Chang also declined to exonerate the former trustees and the trust's outside law firms for their conduct during the controversy.

Chang said that the recent settlement between the attorney general's office and former trustees Richard "Dickie" Wong, Henry Peters, Lokelani Lindsey, Oswald Stender and Gerard Jervis made moot any surcharge claims.

Court-appointed special master Robert Richards, in his May 18 report, took the trust's outside law firms to task for their work in defending the ex-trustees and recommended the surcharge claims.

Chang did not rule on the specific allegations raised by the Richards report nor did he rule on any of the recommendations raised by a mainland firm hired by the trust to investigate allegations raised by the report. The mainland firm, Morgan Lewis & Bockius, found that the work by the firms retained by the former trustees was largely appropriate and benefited the trust.

After the the Richard's report was made public, the estate suspended many of its outside firms, pending an internal investigation. With the Morgan Lewis report, the estate will likely retain some of the firms that it had suspended but not all, said Hamilton McCubbin, the estate's chief executive officer.

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