Battle over fate
of Bishop trustees
heads to court
At issue is whether the five
By Rick Daysog
have hurt the trust and the
estate-run school
Star-BulletinThe bare-knuckles legal spectacle is sure to fill a courtroom typically reserved for inheritance disputes, naming of trustees and other fine points of Hawaii probate law.
The yearlong battle between the state attorney general's office and the Bishop Estate's trustees enters a critical round today in the courtroom of probate Judge Colleen Hirai.
At issue is whether the ongoing Bishop Estate controversy has hurt the trust and the estate-run Kamehameha Schools to the point that Hirai should step in and remove all five trustees in the interim and appoint a receiver to take over their management duties.
Attorney General Margery Bronster sees it that way. She argues that, as a group, current trustees -- Richard Wong, Henry Peters, Lokelani Lindsey, Gerard Jervis and Oswald Stender -- have failed to uphold the estate's primary educational mission.
They accumulated more than $350 million that should have spent on Kamehameha Schools. The accumulation, coming at a time when the estate was cutting back on its outreach programs to native Hawaiians, violated several court orders as well as the will of the estate's founder, Bernice Pauahi Bishop, Bronster said.
The estate, meanwhile, disputed the AG's charges, saying the trust is enjoying its best-ever financial health and has embarked on an ambitious expansion of its education programs.
William McCorriston, Bishop Estate's lawyer, called the accumulation issue a "figment" of Bronster's imagination. McCorriston said the money exists unimpaired, adding that the estate was acting prudently in retaining its earnings for future expenditures, such as the construction of satellite campuses on the Big Island and leeward Oahu.
"If this management is removed for being successful, my goodness what's next?" McCorriston said. "Should we remove all the boards of director of companies in Hawaii who are not doing as well as Kamehameha Schools/Bishop Estate?"
Established in 1884, the Bishop Estate is the state's largest landowner with more than 300,000 acres in Hawaii. The estate was founded to educate children of native Hawaiian ancestry.
Today's hearing comes amid much legal hoopla involving the estate.
An Oahu grand jury is investigating charges that two trustees, Richard Wong and Henry Peters, received kickbacks from Wong's brother-in-law, Jeffrey Stone.
All three deny the allegations and Wong believes that the state tried to get him indicted earlier this week to influence today's hearing.
The estate is also facing a possible criminal investigation involving allegedly illegal campaign contributions to the elections of former state Sen. Milton Holt and Sen. Marshall Ige.
"I'm at a loss to explain why the court has not yet removed these trustees," said Randy Roth, University of Hawaii law professor and co-author of the "Broken Trust" article that criticized trustees' management of the Bishop Estate. "In the history of trust law, there hasn't been a stronger case for removal."
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