The suit filed yesterday contendsBy Rick Daysog
trustees have mismanaged trust assets
Kamehameha Schools/Bishop Estate and two of its trustees are rejecting as baseless a federal class-action lawsuit filed on behalf of all beneficiaries of the $10 billion trust which supports the schools.
Claiming trustees misused and mismanaged trust assets, the lawsuit was filed yesterday by named plaintiffs Elizabeth S. Burgert, Francine Dawson, Belinda A. B. Borangasser and Shirley Kala, all of Hawaiian ancestry and thereby beneficiaries of the trust.
But trustee Gerard Jervis dismissed the suit as an "opportunistic" ploy by outside attorneys to generate legal fees. He called the suit baseless, saying it centers on events that occurred when he was not even a trustee. Jervis said he believed the suit attempts to circumvent efforts by the Probate Court, the state attorney general's ongoing investigation of the estate and reviews by court-appointed master Colbert Matsumoto.
Added trustee Lokelani Lindsey in a statement: "In their haste to jump on the bandwagon, the publicity-hungry carpetbaggers who filed this lawsuit have so little respect for the princess that they have not even bothered to use her correct name, or to correctly identify her legacy."
Hilo resident Burgert, a retiree and grandmother of two current Kamehameha Schools students, alleged that four of the five trustees -- Richard Wong, Henry Peters, Lindsey and Jervis -- "engaged in a course of misconduct that resulted in the dissipation of trust assets and loss of trust income at the expense of the trust and its beneficiaries."
The suit, which seeks damages from the trustees but not from the estate's assets, also said the four trustees mismanaged and co-mingled federal funds slated for native Hawaiian educational and health-care programs.
Trustee Oswald Stender also was named in the complaint, but the suit may not seek damages from him.
"Preliminary review of the complaint indicates that most, if not all, of the issues raised in the complaint are already being addressed in state court," the estate responded in a release last night.
"A notable exception to this duplication of allegations is that the plaintiffs ... ask for compensatory damages to be paid to themselves and the payment of fees to their attorneys," it continued.
The estate's legal staff, which "is confident this matter will be resolved in KS/BE's favor," will make recommendations to trustees at their Jan.6 meeting.
The suit is being handled by Burlingame, Calif.-based Cotchett & Pitre and Maui attorney James Krueger. In the early 1990s, Cotchett & Pitre filed a successful class-action suit against the banking empire of Charles Keating, who was convicted of fraud.
Burgert said she sued out of concern that the estate was not spending enough money on educating Hawaiian children and was losing money on speculative investments and litigation.
Bishop Estate Archive
The Associated Press contributed to this report