The Bishop trustee mayBy Rick Daysog
obtain Oswald Stender's Maui
Maui Land & Pineapple Co. must deliver records relating to an attempt by Bishop Estate trustee Oswald Stender to acquire its stock, a state judge has ruled.
Circuit Judge Kevin Chang denied a motion yesterday by Stender's attorney to quash a subpoena by fellow trustee Lokelani Lindsey seeking the Maui Pine records.
But in denying the motion, Chang also rejected arguments by Lindsey's attorneys who allege that Stender could not bring legal actions against Lindsey because he engaged in self-dealing.
In the legal battle between Bishop Estate's warring board members, Lindsey's attorneys last month subpoenaed Maui Pine executives for all documents, notes and correspondence relating to attempts by Stender and Bishop Estate to invest in Maui Pine, a publicly traded pineapple-growing and real estate company.
Lindsey sought the records after Stender and trustee Gerard Jervis petitioned the Circuit Court to remove her, charging that she breached her fiduciary duties and was unfit to serve.
Michael Green, Lindsey's attorney, said the Maui Pine records would show that Stender had "unclean hands" and therefore could not seek her removal.
But Stender denied the allegation and his attorney, Crystal Rose, said Lindsey is attempting to delay the removal proceedings and deflect blame from herself.
"There is no question that Mrs. Lindsey is on a fishing expedition," Rose said.
The dispute centers on a 1995 attempt by a Stender-led investment group to purchase a controlling interest in Maui Pine, which at the time was undervalued due to declining land values and unfair competition from pineapple growers in Thailand.
Stender previously proposed that the estate acquire a majority interest in Maui Pine's stock, but that plan was rebuffed by the estate's full board.
As part of the proposed transactions, Bishop Estate employee Dan Jones reviewed Maui Pine's financial records. Stender immediately repaid the estate for Jones' work.
In papers previously filed with the court, Green argued that Stender's hiring of Jones in the Maui Pine deal indicates that it was common practice within the trust to hire staffers for personal work. Trustees, in turn, could reimburse the estate later.
Green's own client has been criticized for using estate staffers to obtain zoning variances for her oceanfront home in Punaluu in 1994. Lindsey only recently repaid the estate for the work and only under protest.
Rose called Green's argument "ridiculous," saying that such a custom would be no defense for a breach of trust obligations.
"Taken to its extreme, Mrs. Lindsey is saying that trustees could come together and agree to steal from Kamehameha Schools," Rose said.
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